Rural rate relief will increase from 50% to 100% from next April, saving a business up to £2900 a year.
The measure was announced by Chancellor Philip Hammond in his 2016 Autumn Statement on Wednesday (23 November).
This business rate relief is available to businesses in rural areas with a population under 3,000 – but there are additional conditions attached.
The business must be the only village shop or post office with a rateable value of up to £8,500, or the only public house or petrol station with a rateable value of up to £12,500.
Defra secretary Andrea Leadsom said the measure showed that the government was taking the needs of small rural businesses seriously.
She tweeted: "100% rural rate relief is excellent news to help boost businesses in our countryside."
The Rural Services Network described the increase as in principle a positive move for many rural shops and similar small businesses in the countryside.
The financial position of these rural businesses was often marginal at best, it said.
But network chief executive Graham Biggs warned: "It is important that this extension of rural rate relief is fully funded by central government and not by local councils."
He added: Many of these businesses have 100% relief already – 50% mandatory and 50% given discretionally by their local authority."
The Countryside Alliance described the move to 100% rate relief as "pleasing".
Alliance head of policy Sarah Lee said: "We are seeing first-hand the thousands of innovative rural businesses in our country and it is good to see that the government wants to support them."
A similar view was given by the Federation of Small Businesses.
It said: "FSB has campaigned on this issue for many years and we are delighted that from April 1st next year small businesses will start to benefit.
"We are particularly pleased to see that the government listened to our calls to give rural businesses 100% relief on rates."
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