Chancellor George Osborne has confirmed in the autumn statement that the one-year holiday on business rates for small businesses – due to expire in October 2012 – is to be extended for a further six months at an estimated cost to the Treasury of £210m.

Osborne believes 500,000 companies will benefit from the tax break, with 330,000 not paying any business rates in 2012-13.

The holiday offers 100% relief on business rates up to £6,000, with progressively smaller rebates on amounts up to a cap of £12,000.

The Chancellor says that this will mean a third of all retail shops will have no business rates liability until April 2013.

Responding to the government’s announcements, Liz Peace, chief executive of the British Property Federation, said: "While it is very welcome that small businesses and particularly retailers can be helped in this way, it is disappointing that this has not been extended to those businesses and landlords who own empty shops, or indeed other business premises.

"Taxing empty property continues to suck investment out of our towns and cities."