It has been around since Tudor times in one form or another. The business rates tax has been described as “outdated” and “not fit for purpose,” and various business and lobbying groups have called for a fundamental reform of the tax.

The Federation of Small Businesses (FSB) put business rates at the head of its wish list in the run up to the spring Budget, and it certainly was not alone. The FSB joined forces with other major business lobbyists (the British Retail Consortium, British Council of Shopping Centres, Association of Convenience Stores and British Property Federation) to jointly write to the Treasury demanding action.

The constant pressure appears to have paid off. The tax hasn’t been scrapped entirely as some parties would have liked to see, but one of the Budget changes made by Chancellor George Osborne was that business rates tax relief would permanently double from the current 50% to 100% – effectively making qualifying businesses exempt – for properties with a rateable value of £12,000 or less. The reduction only previously applied to properties with a rateable value of £6,000 or less. Premises with a rateable value of between £12,000 and £15,000, meanwhile, will be eligible for a tapered relief.

According to Mr Osborne, the tax relief would free 600,000 smaller businesses from business rates altogether and see a further 250,000 smaller businesses paying less. In addition, it was announced that corporation tax will fall from its current rate of 20% to 17% by 2020.

Mike Cherry, Policy Director at the FSB, said: “FSB members have campaigned hard to make Small Business Rates Relief permanent, and expand it – and the Chancellor has heeded our calls, taking many small firms out of the system altogether. The combined measures announced on business rates – the single biggest tax cut in today’s Budget – will be viewed by our members as a welcome and important step on the road to fundamental reform. In addition, online retailers will benefit from steps to secure a level playing field for smaller online businesses on VAT.”