Business rates list closing soon

Business rates are charged on most non-domestic premises, including most commercial properties such as shops, offices, pubs, warehouses and factories. Some properties are eligible for discounts from the local council on their business rates. This is called business rates relief. There are a number of reliefs available including small business rate relief, rural rate relief and charitable rate relief.

The non-domestic rating list sets out all rateable values for non-domestic properties in England and Wales. Local authorities use this list to help determine business rates.

A new press release from the Valuation Office Agency (VOA) states the following:

A new non domestic rating list comes into effect on 1 April 2023. You can still let us know if the information about your property on this list isn’t correct. But the closure of the 2017 list means that there are only limited circumstances in which further amendments may be made to it. These are when:

  • changes need to be made to the list following Checks submitted before 1 April 2023 (and any subsequent challenges and appeals);
  • the VOA is correcting inaccuracies on the list (this can be done up to 31 March 2024). If the list is changed, then customers for those properties have the right to make a Check within six months of the change; and
  • a customer wants to challenge the 2017 list on the grounds of a tribunal or court decision. They can do this so long as a Check has been made by 30 September 2023.

This means that you have up until 31 March 2023 to check that the factual information we hold about your property on this list is correct, and to let us know if it isn’t (this is known as making a Check case).

Protecting your business capital

All business owners, but predominantly retailers, leisure and entertainment trades, will have seen their hard-won capital all but exhausted by the needs to meet fixed costs when income generation has been restricted or eliminated by lock-down directives during the early years of the COVID pandemic, and more recently by the downturn in global trade due to the war in Ukraine, inflation, rising interest rates and increases in energy costs.

In the face of these challenges what can beleaguered business owners do to protect their capital base and be in a position step back into the ring as and when consumers start to edge out of their front doors and start spending?

Here’s a few ideas for you to think about:

  1. List all of your fixed costs, those that you have to pay even if you have no income coming in and cancel as many as you can that can be re-established when markets open up again. Obviously, many will be tied to contracts that cannot be broken. In which case:
  2. Contact suppliers, landlords, service providers etc., and see if you can negotiate a moratorium on payments for a period, a reduction in payments or the cancellation of contracts.
  3. When this work is done rework your business plan for the next year and speak to your bank or other sources to secure any cash required to meet the likely dips in cash resources.
  4. Importantly, start to think about waking up your business when consumer interest in spending starts to increase demand for your goods or services.

And finally, speak to us. There is no substitute for sharing this planning process with your professional adviser. We know your business. We know how you have burned the midnight oil to develop your business and the problems you have overcome along the way. We can, and we want to help. Cal now so we can start to unravel your options.

New business Energy Bills Discount Scheme

The new business Energy Bills Discount Scheme will replace the current Energy Bill Relief Scheme which is coming to an end on 31 March 2023. The new scheme will offer support to eligible non-domestic energy customers, including UK businesses, the voluntary sector – such as charities – and the public sector – for example, schools and hospitals – from 1 April 2023 to 31 March 2024.

The new scheme has been designed to help support businesses over the next 12 months whilst at the same time limiting the taxpayer’s exposure to volatile energy markets. A cap has been set at £5.5 billion based on estimated volumes.

Under the new scheme, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill with a price threshold of £107 per MWh and a unit discount of up to £19.61/MWh applied to their electricity bill with a price threshold of £302 per MWh. The relative discount will only be applied if wholesale prices are above the stated price thresholds.

The government has also confirmed that a substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries. These businesses will receive a gas and electricity bill discount based on a supported price which will be capped by a maximum unit discount of £40/MWh for gas with a price threshold of £99 per MWh and £89/MWh for electricity with a price threshold of £185 per MWh. This discount will only apply to 70% of energy volumes.

As with the original scheme, suppliers will automatically apply reductions to the bills of all eligible non-domestic customers.

Ways you can count on us…

Leaving politics to one side, how can we deal with the current pressures on businesses? Rising costs, reducing revenues as the cost-of-living issues impact activity, increasing taxes – Corporation Tax will include a main rate of 25% from the 1 April 2023 – and a background of continuing supply difficulties.

At this time of the year many of us are also required to make Self-Assessment tax payments.

According to Age UK, we are a nation of worriers who find it difficult to share our problems. These can range from financial concerns as well as other stress creating issues.

But top of the bill – over 50% of the population – are concerns over money problems.

We can help…

As well as keeping business owners up-to-date with their filing obligations we can also advise on a whole range of topics that are likely to play on the minds of entrepreneurs.

Our successes over many years, in helping clients, means that we have a wealth of experience that can be shared with you to have a positive impact on your business affairs.

Pick up the phone. Let’s discuss your options and see if we can help you resolve your difficulties; see if sharing your problems will open up new possibilities.

New Energy Bills Discount Scheme

The government has published details of a new Energy Bills Discount Scheme which will replace the current Energy Bill Relief Scheme that comes to an end on 31 March 2023. The new scheme will offer support until 31 March 2024, to eligible non-domestic energy customers, including UK businesses, the voluntary sector, for example charities, and the public sector such as schools and hospitals.

Under the new scheme, eligible non-domestic customers who have a contract with a licensed energy supplier will see a unit discount of up to £6.97/MWh automatically applied to their gas bill and a unit discount of up to £19.61/MWh applied to their electricity bill, except for those benefitting from lower energy prices.

The government has also confirmed that a substantially higher level of support will be provided to businesses in sectors identified as being the most energy and trade intensive – predominately manufacturing industries. These businesses will receive a gas and electricity bill discount based on a supported price which will be capped by a maximum unit discount of £40.0/MWh for gas and £89.1/MWh for electricity.

The latest data has shown that wholesale gas prices are continuing to fall and there are some concerns that the falling prices are not being passed on to businesses fast enough by energy suppliers.
 

Which way to turn

Inflation and recession are cruel task-masters.

If you provide goods or services that can be readily sourced from alternative suppliers, and at a lower cost, trying to beef-up your sales prices will likely result in lost income as your customers go elsewhere. If your costs are increasing this can only lead to lower profits.

If you sell luxury goods, there will likely be a reduction in demand as customers concentrate their expenditure on meeting rising fuel and food bills.

Business owners can react by reducing their own costs but there is a limit to the saving that can be made.

There is an argument to mothball business activity. i.e., reduce activity and hibernate until market conditions improve, although this is unlikely to prove a workable strategy for an extended period.

Businesses who supply goods or services with no competition, or for goods that have no ready substitutes, are in the best position as they can increase their prices to cover cost increases with little or no impact on sales.

During this period, all businesses would be wise to take control of cashflow and scale down or at least reconsider investment activity until market conditions become more buoyant.

If you are in business and really don’t know which way to turn, please call so we can talk over your options.

Companies with 31 December year-end date

Have you considered any last-minute planning options if your company has a 31 December 2022 year-end date?

It is not too late to consider your options. For example:

  1. Expenditure on qualifying plant or other equipment may qualify for the super-deduction capital allowance. This would allow you to write off 130% of cost against your profits for 2022 if the purchase was completed before 31 December 2022.
  2. Which is the best option, to take 2022 bonuses before or after 31 December 2022?
  3. If you are expecting profits to reduce in the first quarter of 2023, perhaps making a loss in this period, would it reduce your corporation tax bill if you extended your accounting date to 31 March 2023, and use the first quarter losses earlier?
  4. Have you prepared a budget for 2023?
  5. Have you updated any business exit plans?

These options are the tip of the planning iceberg. Please call so we can decide if there are any options available before the 31 December deadline.

2023 is likely to be a challenging year with a projected recession, continuing high inflation and upward pressure on interest rates.

Make sure you don’t miss out. Take time out to consider your options now.

Flexible subsidies for businesses from 2023

The Department for Business, Energy and Industrial Strategy has announced that the new UK subsidy regime will come fully into force from 4 January 2023 when the Subsidy Control Act 2022 takes effect.

The new subsidy regime enables public authorities to deliver subsidies that are tailored to local needs and to drive economic growth. These new rules represent a major shift away from the old EU state aid rules and was made possible after Brexit. It should be noted that EU state aid rules will continue to apply to subsidies covered by the Northern Ireland Protocol.

It is hoped that the new opportunities to deliver flexible subsidies will provide a big boost for businesses and further impetus behind the government’s plans to supercharge economic growth.

This will allow the devolved administrations and local authorities to deliver subsidies that are tailored to local needs in a speedy manner. Under the EU system, all subsidies except those under a ‘Block Exemption Regulation’ had to undergo a lengthy bureaucratic process of being notified to and approved by the European Commission in advance, delaying vital funds from reaching viable businesses in good time.

Small Business rate relief

Business rates are charged on most non-domestic premises, including most commercial properties such as shops, offices, pubs, warehouses and factories. Some properties are eligible for discounts from the local council on their business rates. This is called business rates relief. There are a number of reliefs available including small business rate relief, rural rate relief and charitable rate relief.

In England, small businesses rate relief is available on properties with a rateable value up to £15,000. Small businesses that occupy property with a rateable value of £12,000 or less pay no business rates. There is a tapered rate of relief on properties with a rateable value up to £15,000. Relief is usually only available to businesses with one property but can be extended under certain limited circumstances.

In Scotland, the relief is known as the Small Business Bonus Scheme (SBBS). Business rates relief through the SBBS scheme is available if the combined rateable value of all business premises is £35,000 or less and, the rateable value of individual premises is £18,000 or less.

In Wales, the relief is known as the Welsh Small Business Rates Relief scheme. 100% rate relief is available to eligible businesses premises with a rateable value of up to £6,000 and a tapered relief is available on properties with a rateable value between £6,001 and £12,000.

In Northern Ireland, the Small Business Rate Relief (SBRR) scheme is available. Eligibility for the SBRR is based on the Net Annual Value (NAV) of business premises. There are three levels of SBRR where the reductions in rate relief range from 50% to 20%. No relief is available for properties with a NAV of more than £15,000.

Energy Bill Relief Scheme launched

The Business Secretary Jacob Rees-Mogg has announced the launch of the new Energy Bill Relief Scheme to help cut energy bills in the non-domestic sector. The new scheme will cover all non-domestic energy customers, including UK businesses, the voluntary sector, for example charities and the public sector such as schools and hospitals.

This new support measure will apply to fixed contracts agreed on or after 1 April 2022, and to deemed, variable, flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023 and will be automatically applied to qualifying businesses fuel costs. The level of price reduction for each business will vary depending on their contract type and circumstances.

The discount on energy costs for the non-domestic sector is broadly equivalent to the Energy Price Guarantee for households that was announced earlier this month. This Energy Price Guarantee will see the average household have their energy bills capped at £2,500 a year.

Whilst the support for households has been put in place for two years, the Energy Bill Relief Scheme for non-domestic energy users will apply for six months. However, the government has said that further support to those deemed eligible will be available after the end of the initial six-month support period.

Commenting on the launch of the scheme, the Prime Minister Liz Truss said:

I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.

As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.’