What does it mean for you and your business?
Announced on Wednesday 21 September 2022, the government are providing a support package for businesses, which will see energy price cuts through a new Energy Bill Relief Scheme.
The government will provide a discount on wholesale gas and electricity prices for all UK businesses.
The scheme will apply to energy use from 1 October 2022 to 31 March 2023, running for an initial 6 month period. The scheme will be reviewed in 3 months which will then detail future support from March 2023 to certain business sectors which are deemed ‘vulnerable’.
Who is eligible
Eligibility for the scheme will be available to everyone on a non-domestic contract, which includes those businesses who are:
- On existing fixed price contracts that were agreed on or after 1 April 2022
- Signing new fixed price contracts
- On deemed / out of contract or variable tariffs
- On flexible purchase or similar contracts
How much will bills be cut by
The government will issue a discount on the gas and electricity unit prices. To calculate the discount, the estimated wholesale portion of the unit price the business would be paying this winter will be compared to a baseline ‘government supported price’ which is lower than currently expected wholesale prices this winter.
For all UK businesses the baseline supported price is set at:
- £211 per MWh for electricity
- £75 per MWh for gas
Wholesale costs in England, Scotland and Wales for this winter are currently expected to be around:
- £600 per MWh for electricity
- £180 per MWh for gas
Other add-ons such as standing charges will be added by suppliers.
How the energy price cuts work
The support will be automatically applied to all eligible bills. You do not need to apply for the scheme.
For energy used in October, savings will be seen in October bills but will be received from November.
Points to be aware of
Businesses on default or variable tariffs will pay reduced bills, but these will still change over time and may still be subject to price increases.
The government is working with suppliers to ensure all their customers in England, Scotland and Wales are given the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish to guarantee a set price.
‘Mini’-Budget
Chancellor Kwasi Kwarteng is holding a ‘Mini’-Budget on Friday 23 September 2022, which is expected to make tax cuts, both beneficial to individuals and businesses.
Newly appointed Prime Minister, Liz Truss, has indicated there will be a full budget later in the year.
Cuts that are expected:
- Reversing the recent increase in National Insurance
- Scrapping the planned rise in Corporation Tax
- Reducing the percentage for Income Tax from 20% to 19%
- Cutting Stamp Duty
How we can help you
Once the ‘Mini’-Budget has been announced, we will be issuing further information.
In the meantime, if you’d like to speak with us in light of the recent announcements, please contact mail@seavorchartered.co.uk or 01228 904904.
