In his speech to the party’s annual conference, Milliband said he wanted Labour to be “the party of small business”.
He accused the government of reducing the tax burden on large business while raising it for small firms.
“We need a competitive tax regime for large businesses but frankly they’ve short-changed small business and I’m going to put it right,” he said.
The business rate reversal would be paid for by scrapping a planned 1% cut in corporation tax in 2015.
ACS chief executive James Lowman said the move would benefit tens of thousands of shops, but he added: “Immediate action is vital, but it must be accompanied by a commitment to a fundamental review of the business rates system.”
Labour’s decision to hold business rates at 2014 levels for two years would affect properties and commercial premises with an annual rental value of £50,000 or less.
The Labour party also revealed it is supportive of minimum unit pricing on alcohol.
Andy Burnham, shadow secretary of state for health, told the party conference in Brighton that government U-turns on MUP and plain packaging on cigarettes had left its public health policy “in the wilderness” and added: “I am in principle committed to a form of minimum unit pricing. There are ways you can do it constructed so you really get to the heart of the problem.”