In his first, and last, spring Budget - the Budget will move to the autumn from this year - Hammond said that business rates were necessary because they brought in £25bn per year – all of which, by 2020, will be going to fund local government.
The business rate relief fund would help ease some of the burden of those worst-hit by the recent rate revaluation, Hammond said. Details will come from communities secretary Sajid Javid "in due course"
Businesses due to lose small business rate relief will see a £50 monthly cap on business rates.
Hammond promised reform of the system "in the medium term" saying "we have to find a better way of taxing the digital part of the economy".
Corporation tax will also fall to 17% by 2020.
Businesses under the VAT threshold will also see a delay by one year of the introduction of quarterly reporting.
"I’m listening to the voice of business," Hamond said.
He announced extra money to ease pinch points on roads: £90m for The North and £23m for The Midlands.
He also revealed £350m for the Scottish Government, £320m for the Welsh Assembly and £120m for the Northern Ireland Assembly.
On what has been termed 'the gig economy' Hammond said there would be a consultation on the level of national insurance (NI) paid by the self-employed.
NI for self-employed workers will rise from 9% to 10% in April 2018 and to 11% in April 2019 - 60p a week on average
Announcing a tax avoidance clampdown totalling £820m, he said "Britain has the most attractive corporate business rate in the G7" but added the UK must be "the most attractive place to start and grow a business."
Local authority funding
The chancellor announced £2bn for social care over three years, which could help ease cuts elsewhere, such as parks. However, this still does not cancel out the £4.5bn of funding cut from social care since 2010 and the increasing cost to local authorities.
Economy, national debt and borrowing
Hammond said that UK economic growth was now second only to Germany with unemployment at an 11-year low. But he added "productivity remains stubbornly low".
The OBR has revised down its short-term forecast of Public Sector Net Borrowing. It forecasts we will borrow £51.7bn in 2016, £53.8bn in 2017, £40.8bn in 2018, £21.4bn in 2019 and £20.6bn in 2020 but Hammond said we were still spending too much
"The only responsible course of action is to continue with our plan. We will not saddle our children with ever-increasing debt," Hammond said.
Education and training
He also introduced a new vocational alternative to A-levels, T-levels, which will replace 13,000 qualifications with just 15 and will include "a high-quality 3-month work placement for every student".
"Too many young people are leaving education without the skills they need for the labour market" he said.
He also said the number of hours training for 16-19 year old technical students will more than double.
There will be an extra £300m to support 1,000 new PhD places and fellowships in STEM (science, technology, engineering and maths) subjects.
Hammond said that retraining was vital in an ever-changing labour market. So he announced £40m for pilot schemes to test different approaches to lifelong learning.
Leader of the opposition Jeremy Corbyn said the budget displayed an "utter complacency about the state of our economy and the crisis facing our public services and the reality of daily life."
He said the improving economy did not help 9,000 workers on zero hours contracts, those whose pay does not cover their living expenses, private renters spending nearly half their income on rent, the UK’s 4,000 homeless people, or public sector workers who have not had a pay rise in seven years yet are "working harder than ever covering the people who have gone".
"This government has taken a sledgehammer to public sector in recent years," he said.
He criticised the sale last year of school playing fields – equivalent in size to 500 football pitches - and said the Government should recognise that pollution is "an urgent public health crisis".
NFU President Meurig Raymond said: "There were few measures in today’s Budget to help create an environment that supports profitable, progressive and competitive farm businesses.
"The Chancellor’s announcement on capping business rates increases will be welcome news to members with small diversified farming businesses.
"However, the rise in National Insurance Contributions for the self-employed by 1% next year and a further 1% the year after will have a detrimental impact for farmers. The NFU is striving to make Government aware of the implications this will have on the sector.
"We are still very concerned about Government proposals on Making Tax Digital. While we welcome the announcement that it will be delayed until April 2019 for businesses under the VAT threshold1, many of our members will still be impacted with a costly and burdensome process of accounting from April next year.
"Many farmers will feel that this Budget was a missed opportunity, particularly that the Chancellor did not see fit to extend capital allowances as part of the Government’s productivity plans. Farming needs to invest to increase productivity so it can compete post-Brexit.
"Farming produces the raw ingredients for the UK’s largest manufacturing sector – food and drink – which employs nearly 4 million people and contributes £108 billion to the economy. For every £1 invested in farming, it contributes £7.40 back to the country’s economy; it’s time for the Chancellor and Government to fully recognise British farming’s value for money."
British Retail Consortium chief executive Helen Dickinson said: "We agree with the Chancellor that the world around us is changing quickly and we need to have a business tax system that is fit for purpose in the 21st century. Any review needs to incorporate business tax in its entirety and not be constrained by the technicality of fiscal neutrality around business rates.
"We hope that the relief measures will help some of those businesses hardest hit by the revaluation, albeit only temporarily. However, more short term relief measures continue to add complexity to an already impenetrable system. £435 million is a drop in the ocean compared with the £25 billion a year that the tax raises. This is yet another sticking plaster on a chronically ill patient – an unsustainable property tax higher here than anywhere in the developed world."
Ian Cass, chief executive of the Forum of Private Business said: "If there are no incentives for small businesses this would lead to fewer people taking the plunge into self-employment and job creation, and opting simply to be employed.
"That would be bad news both for the UK economy and for the jobs market.
"The immediate National Insurance changes announced will already have some prospective small businesses and small employers thinking twice.
"Business owners are already facing increased costs from auto-enrolment, digital tax, and business rate increases. Combined these will have a negative impact on profits. Increasing the tax rate on dividends for business owners is just another blow to the UK’s risk taking entrepreneurs. These are the very people who create growth and employment, and continuing to increase both regulatory and tax burdens on them while removing rewards is hardly smart.
"Transparency and fairness are at the heart of the Forum's ethos but we need to ensure any changes do not unfairly impact small businesses, whilst big businesses employ expensive lawyers to circumvent new rules.
"Skills and support for new technologies are both on the Forum’s wish list," says Ian Cass, "but we need to see the funding for both spread evenly over the country as part of a countrywide growth strategy. We will be working with the Government to help policy makers understand what skills are needed by businesses, and to focus their spend in the right direction."
"For small business owners, there are more negatives than positives in this budget. With the uncertainties of Brexit, businesses were looking for a sympathetic ear. Those with increased business rates in the South and London might have been heard, but most small business owners will be unimpressed with the Chancellor’s lack of commitment to the high street, and hard working family businesses.
"This government continues to neglect the small business sector at a time when they need them, to help get Britain trading more productively.
"They do so at their peril"