THOUSANDS of cafes, pubs and hairdressers could be spared from paying business rates thanks to a Budget tax change.
It is understood that the Prime Minister will honour a promise he made in the summer to raise the threshold at which firms start to pay business rates from £12,000 to £18,000, according to The Times.
The change could benefit small hospitality, retail and leisure companies in England.
Around 75,000 properties could benefit, including 39,000 shops, 2,600 pubs, 2,500 restaurants, 2,000 hairdressers and beauty salons, and 1,600 cafes according to an analysis by the tax firm Ryan.
Prime Minister Andy Burnham pledged to raise the threshold at which businesses pay the levy during the Makerfield by-election.
The policy could cost the Treasury around £460million a year, which will be funded by tax rises on online retail giants such as Amazon and eBay.
The £1billion Budget crackdown would mean online marketplaces would be responsible for collecting VAT owed by retailers selling through their platforms.
It would target sellers – mainly based overseas – who avoid paying the tax to allow them to undercut British sellers.
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The unpaid tax will be the focus so it will not be a new tax on shoppers.
It comes after ministers have become increasingly concerned that some Chinese retailers that are selling through online retailers are dodging VAT at the standard 20% rate.
There are concerns this is putting British businesses at a disadvantage.
The Chancellor is expected to focus on giving businesses and households “breathing room” to help with the higher cost of living.
An HM Treasury spokesperson said: “As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”