Mr Sunak confirmed that the system will now be subjected to a review every three years and to cancel next year’s multiplier, with firms in retail, hospitality and leisure to be offered for a 50 per cent business rate discount – capped at £110,000.
The Chancellor added that he was to abolish rate payments for businesses investing in green upgrades like introducing solar panels.
However, Tony Danker, inset, CBI director general, said while the Chancellor had made real strides in making the system more palatable, more action was needed.
“The hard truth is that wholesale reform to unlock investment was rejected today,” said Mr Danker.
“The Government missed the opportunity to truly reform a business rates system that diminishes Britain’s high streets and factories.”
Mr Danker told The Yorkshire Post this month that reform of the tax was the number one priority of its close to 200,000 members and the Treasury has faced sustained calls from business leaders for it to be reviewed.
And while the changes were welcomed, many business and political leaders said the changes did not go far enough to mitigate against the tens of billions it costs UK firms each year or tackle the relatively low levels of tax paid by online retail giants.
Shadow Chancellor Rachel Reeves said: “Businesses based on the high street are the lifeblood of our communities and often the first venture for entrepreneurs.
“But despite what the Chancellor has said today, businesses will still be held back by punitive and unfair business rates.”
Mr Sunak told MPs: “We on this side of the House are clear reckless, unfunded promises to abolish a tax which raises £25bn every year are completely irresponsible.”
The Chancellor added: “First, we will make the business rates system fairer and timelier with more frequent revaluations every three years.
“The new revaluation cycle will be delivered from 2023.”
Andy Wood, managing partner for professional services firm Grant Thornton in Yorkshire and the North East, said the changes to rates would provide relief given corporation tax is set to rise next year, adding that the hospitality and leisure sectors had suffered the most during the pandemic.
Shevaun Haviland, director general of the British Chambers of Commerce, also welcomed the move but added that the Chancellor may need to take further action if firms are faced with further disruption around supply chain costs and disruption, labour shortages, price rises and soaring energy bills and taxes.