Business rates in England will be abolished for one year for firms in the leisure and hospitality sectors with a rateable value below £51,000.

This means that thousands of small firms – from gyms and sports clubs to small hotels and B&Bs – will not pay any business rates in the coming year.

The announcement was made by chancellor Rishi Sunak, who delivered his first budget in the House of Commons today (11 March).

The measure is an expansion of a pledge made in the 2019 Conservative manifesto, which outlined plans to increase business rates discounts for cinemas and restaurants (with a rateable value of less than £51,0000) to 60 per cent.

Sunak said the 60 per cent pledge would be extended to 100 per cent in order to help the businesses weather the effects of the Coronavirus (COVID-19).

He then added: "Gyms, small hotels, sports clubs, museums and theatres wouldn't have originally benefitted from the rate discount – but they could be some of the hardest-hit.

“So, for this year, I have decided to extend the 100 per cent retail discount to them as well.

“That means any eligible retail, leisure or hospitality business with a rateable value below £51,000 will, over the next financial year, pay no business rates whatsoever."

Physical activity body ukactive welcomed the news.

“We recognise the enormity of the current situation facing the government – as our nation manages the immediate concerns around the spread of coronavirus – and welcome the news that organisations with health at their very heart will receive crucial support to keep their doors open and keep the public well," said ukactive CEO Huw Edwards.

“As part of its emergency measures for the coming year, the government has responded to ukactive’s call to extend business rate cuts to gyms and leisure centres – reducing a major barrier to business.

“The physical activity sector can drive footfall back to our nation’s high streets, while easing pressure on the NHS and supporting public health outcomes at the same time."

Lisa Wainwright, CEO of the Sport and Recreation Alliance, added: "We're thrilled to see the Chancellor has listened to our call to cut the business rates burden on grassroots sports clubs & physical activity providers by extending temporary 100 per cent retail rate relief to the leisure sector for 2020-21.

"In further good news, sports clubs eligible for small business rates relief (SBRR) will get a one-off £3,000 cash boost."

The business rate cut is one of the many budgetary measures introduced in the budget, designed to protect businesses from the effects of the Coronavirus (COVID-19) outbreak.

Others affecting the leisure industry include:

• Firms with fewer than 250 staff will be refunded for sick pay payments for two weeks

• Small firms will be able to access "business interruption" loans of up to £1.2m

Separately, the chancellor also froze all duties on spirits, beer, cider and wine

Responding to the budget, Emma McClarkin, CEO of the British Beer & Pub Association, said: "Pub goers across the UK will be toasting the Chancellor tonight for freezing beer duty. This freeze alone will save pub goers £80 million and secure 2,000 vital jobs across the country.

"82 per cent of the beer we drink here is brewed in the UK, so this is a very welcome decision that will help pubs and brewers across the UK.