Chancellor defers business rates rise

Chancellor Alistair Darling has decided to defer the planned increase in business rates scheduled to come into effect today.

Rates would have increased by 5% today, instead they will rise by 2% immediately, with the remaining rises due in the two years from 2010. However, businesses will face the full 5% rise over the next four months, because legislation will not be introduced until August at the earliest

Alistair Darling said: "The government recognises that businesses need help now to ease their cash flow at a time when money is very tight. This measure will help businesses to smooth their rates payments over the next few years to deal with the effects of the recent spike in inflation."