Chancellor Rishi Sunak announced the suspension of business rates for smaller firms during his Budget on Wednesday (11 March).

The move means those high street shops with a rateable value of less than £51,500 will not have to pay business rates for the next financial year.

Sunak said the temporary one-year abolition of business rates for these firms was an “exceptional step”.

He also extended the temporary abolition to other businesses including small hotels, bed and breakfasts, museums, art galleries, theatres and caravan parks because they faced being “some of the hardest-hit” sectors.

“For this year, I have decided to extend the 100% retail discount to them as well,” said Sunak. “Any eligible retail, leisure or hospitality business with a rateable value below £51,000 will, over the next financial year, pay no business rates.”

“That’s a tax cut worth over £1 billion and will save each business up to £25,000.”

Sunak also promised that firms which currently qualify for small business rates relief would have access to a £3,000 cash grant per business.

“This is a £2 billion cash injection direct to 700,000 of our smallest businesses,” he told the House of Commons.

Another temporary move to help smaller businesses cope with the impact of Covid-19 will see the government refunding statutory sick pay for up to 14 days for employees who have to go into self-isolation. This will apply to firms with less than 250 employees.

“It will be refunded by the government in full – that’s worth up to £2 billion for up to two million businesses,” said Sunak.

Sunak said the government’s actions to combat coronavirus were “temporary, timely and targeted”.