Recruiters have welcomed business rates being deferred, following Chancellor Alistair Darling’s announcement that he was going back on plans to introduce a 5% rate increase from 1 April.

Rather than having to pay the 5% increase this year, firms will face a 2% rise, with business owners negotiating payment of the rest over the next two years.

The rates, which apply to any firm that occupies nondomestic premises, help fund local services provided by local authorities and are calculated using the premises’ rateable value and the multiplier, set by the government,with different multipliers used for England, Wales, Scotland and Northern Ireland.

“I think it is a climate where things are up for negotiation,” said Jacqui Sterry, director at hospitality recruiter Mise en Place. “Our office space is not huge but in terms of rent and rates, the ones with the bigger office spaces will see the biggest benefit because they pay more rates.”

Hospitality recruiter Marc Moreso operates his business, SRG and jobs board leisurejobs.com, from a converted girls school in London’s Battersea Park. He told Recruiter that his large premises were not cheap, so a staggered approach to business rates from government was welcome.

“Any further taxing of our business is putting a strain on every division and every line. The less that impact can be, the greater number of jobs we can put people into as an employer internally ourselves,” he said.

The key benefit to recruiters will be easing cash flow concerns, Royal Institute of Chartered Surveyors (RICS) rating spokesperson Blake Penfold said.

“This is not really a ‘cut’, it is the deferral of part of an increase. There will be some limited benefit to business this year as the increase is reduced from 5% to 2% but the balance (3%) has to be repaid over the next two years, so the benefit is one of cash flow rather than total liability.

“Recruiters should seek details from the Department of Communities and Local Government (DCLG) website and if still in doubt seek advice from a chartered surveyor specialising in business rates,” he said.