New week, new budget – here’s how your business is likely to fare

The chaos raging through Westminster has led to rabid uncertainty among UK businesses.

Kwasi Kwarteng’s now-infamous and disastrous mini-budget led to him being sacked as Chancellor of the Exchequer, with Jeremy Hunt being installed in his place.

Kwarteng lasted just 38 days in the role, during which time his “Growth Plan” drastically affected the financial markets and caused a massive drop in the value of the pound.

Hunt, the UK’s fourth chancellor since the start of July, has backtracked on virtually all of the widely-criticised tax measures that Kwarteng introduced.

These included:

Abolishing the 45% income tax higher rate and cutting the basic rate to 19%
Scrapping the planned corporation tax increase from 19% to 25%
Reversing Rishi Sunak’s National Insurance Health and Social Care levy
Increasing the threshold for stamp duty payments to £250,000 (£425,000 in the case of first-time buyers)
Scrapping limits on bonuses for bankers

The reaction to Kwarteng’s announcement was catastrophic, with the pound falling to a record low against the US dollar and the UK’s financial position destabilised drastically.

And the fallout was swift and brutal.

The now-resigned Prime Minister Liz Truss – herself only in the job since the first week of September – sacked her long-time friend for causing the turmoil and installed Hunt as his successor.

The new man at No11 ripped up the mini-budget’s pledges and started over again, and his measures included abandoning the government’s energy price guarantee.

Support for households will remain in place until April but, assistance beyond then will be reviewed and is yet to be confirmed.

“Beyond next April, the Prime Minister and I have agreed it would not be responsible to continue exposing the public finances to unlimited volatility in international gas prices,” the chancellor told the House of Commons.

“So I am announcing today a Treasury-led review into how we support energy bills beyond April next year.

“The review’s objective is to design a new approach that will cost the taxpayer significantly less than planned whilst ensuring enough support for those in need.

“Any support for businesses will be targeted to those most affected. And the new approach will better incentivise energy efficiency.”

In September, the government had committed to a cap on industrial energy prices, with further supporting measures for “the most vulnerable non-domestic customers” to be announced.

Now, with rising inflation and interest rates, firms are – rightly – concerned about their soaring running costs. Business managers just like you require a degree of certainty in order to plan their firm’s short, medium and long-term future.

Bosses up and down the country, running companies of all sizes, require stable economic conditions. That’s something that the present havoc in the House of Commons means is not being provided at Westminster. The current economic climate and outlandish running costs are putting pressure on SMEs and threatening their prospects of survival.

So, right now, you need to look to your own business dealings, such as the purchase of your business energy supply and whether you got the best deal available. Gas prices have increased by 2,000%, while the wholesale electricity price has gone up by an average of more than 1,200% across Europe’s big-hitters and the UK.

The Energy Bill Relief Scheme provides financial assistance for businesses, charities and public sector organisations. It’s aimed at encouraging businesses to improve energy efficiency as well as allowing them to access the support available.

The scheme will be reviewed in the spring, when government officials will examine:

How effective it has been in supporting non-domestic energy users.
Which groups (by sector, size or location) are most vulnerable to the rise in power prices.
Whether extending the scheme or replacing it with a different scheme is the best way to continue supporting businesses.

What is clear is that right now businesses need to find ways to reduce their running costs. Part of that drive for efficiency should be examining how they came to enter into a deal for their energy supply.

If you feel you have been paying more than you should for your firm’s gas and electricity you may have a case to claim compensation.

Questions you need to ask yourself include (but are not limited to):

Did you use a broker or energy consultant to seek out the best business energy deal?
Did you act on the advice they gave you and enter into a legally-binding contract?
Were they clear and specific about the commission they would earn for arranging your deal?
Were you given any promises or assurances which, after you switched providers, turned out to be inaccurate, misleading or exaggerated?
Did you suffer any losses as a result – put simply, are your energy bills higher than they should be?

If the answer to one or more of the above questions is yes, then it’s time to take action.

Speak to a Barings Law advisor about making a claim for mis-sold business energy.

We should be able to tell in a free initial consultation if your power supply was mis-sold and how we can set about claiming back money you have lost. What’s more, we work on a no-win no-fee basis, so there’s absolutely no financial risk to you by making a claim.

Call us on 0161 200 9960 or click the icon at the bottom right of this page to start a webchat with a member of our customer service team.