Retailers face higher employment costs after the chancellor confirmed today that the National Living Wage would rise to £7.50 per hour in April 2017.

However, rural store owners will benefit from an increase in rural rate relief to 100%, saving them up to £2,900 a year, Philip Hammond announced in the Autumn Statement.

He confirmed that he would implement the previously announced business rates reduction package, which includes raising the relief threshold to £12,000 next year, and cutting corporation tax from 20% to 17% by 2020.

Currently rural retailers are only entitled to 50% rate relief, with further relief dependent on the discretion of local authorities. Today’s announcement brings rural retailers in line with other small businesses.

Hammond also announced that the tax-free allowance would rise to £12,500 by 2020, while fuel duty would be frozen for the seventh consecutive year next April.

Association of Convenience Stores chief executive James Lowman welcomed the introduction of 100% rural rate relief for small businesses: ”Over a third of stores in the convenience sector operate in rural areas, playing an essential role in their communities. However, we urge government to ensure that their plans to develop infrastructure in the UK include rural areas that have often been left with substandard broadband and mobile coverage.”

But on the announcement to increase the National Living Wage to £7.50, he said: “Convenience store retailers are already cutting back as a result of the introduction of the National Living Wage at £7.20. Today’s announcement of a £7.50 National Living Wage rate in 2017 will result in further staff hours being cut, investment plans being delayed or cancelled altogether and retailers having to take on more hours in the business to make ends meet.”

The chancellor did not take any action to address the controversial ‘check, challenge, appeal’ plans that could see businesses that make successful appeals to their rates bills still overpaying. Lowman said: “We are disappointed at the chancellor’s refusal to acknowledge the unfair business rates appeals system in the Autumn Statement. At a time when business rates are increasing for many, ensuring that the appeals process does not leave retailers and other small businesses out of pocket is crucial. The current plans will see many businesses overpaying on their rates even if their appeals are successful. The chancellor must take immediate action to address this issue.”