Chancellor Philip Hammond is expected to cut business rates by a third for about half a million small retailers in today’s Budget.

While the relief will be welcomed by retailers, there will also be disappointment that big companies are not expected to benefit despite the turmoil engulfing well-known high street names.

There will also be interest today in whether Hammond outlines plans for a tax on online retailers.

Hammond intends to grant £900m of immediate business rates relief for small retailers in an effort to reinvigorate hard-pressed high streets, The Guardian reported.

There will also be a £650m transformation fund for high streets to help them over the longer term, including the development of infrastructure and transport links.

It is unclear whether he will introduce an online sales tax or similar, or outline plans for such a tax.

Hammond discussed the future of the high street and the rise of online on Sky’s Ridge on Sunday programme.

He said: “The British have taken to online shopping like no other nation on earth and for better or worse we have to recognise that is happening so our high streets have to change.

“We want to protect them because we want them to remain at the heart of our communities but we can’t do that by freezing the model of 10 or 20 years in aspic, it won’t work.

We’ve got to help the high street to evolve. The high street of the future, frankly, will have fewer retail outlets and more leisure destinations, more food and drink outlets.

“I expect that high streets of the future will be smaller with more of the peripheral areas around them redeveloped as housing.”

Asked whether he was looking at business rates or online transaction taxes, Hammond said: “We’ll look at the ways we can help to smooth this process, but it’s very important that we recognise that the high street will have to change. We can support the high street as it changes but we can’t prevent that change from happening.”