The Government will base business rates increases on the CPI (consumer price index) index rather than RPI (retail price index) two years earlier than planned, by April 2018.
Hammond said the move is worth £2.3bn to businesses over the next five years.
The chancellor also said government will re-look at the so-called ‘staircase tax’. The tax, following a Supreme Court ruling, meant up to 30,000 small businesses faced large rates increases if they occupied different floors in the same building.
He said: “We will change the law to ensure that where a business has been impacted by the Supreme Court ruling it can have its original bill reinstated if it chooses, and backdated.”
The British Antiques Dealers’ Association (BADA) chief executive Marco Forgione said: "We cautiously welcome the business rates update today but there still needs to be a more equitable approach to the rateable value of property on high streets. More must be done to help small businesses otherwise it will only be the multi-national brands that will be able to afford to take space on key high streets."
Rebecca Davies, chief executive of association LAPADA, said: "On the basis that expectations were low, three good things have come out of the budget for the trade: the business rates changes being brought forward to next April, which should help keep increases in charges down, the decision not to lower the VAT threshold, which may help new dealers and those operating at the lower end, and the surprising but welcome freeze on fuel duty, which will be of help in general."
Business rates will also move to more regular re-evaluations every three years.
Toby Ryland, corporate tax partner at chartered accountants HW Fisher & Company, said: “The changes to the way business rates are increased are a classic sucker punch. Initially businesses will see rates rise more slowly, but before long they’ll be paying more as revaluations will happen every three years rather than every five.”
The government is also planning to pilot a scheme to allow local government to hold on to 100% of business rates in London from next year.
Also confirmed today was the VAT threshold for small businesses will be maintained it at its current level of £85,000 for the next two years.