As a small business owner, you're always looking for ways to save money. You may have heard that the government is capping energy bills, but what does that mean for you? And how can you take advantage of it? In this blog post, we'll break down the new tax caps and explain how they can help your business save money on its energy bills. We'll also offer some tips on how to reduce your energy usage and lower your bills even further. So read on to find out more!
Energy Bill Rises Now and, in the Future
The maximum amount that energy supplies can charges customers in England, Scotland, and Wales is due to be announce at the end of this month for October 2022. Cornwall cited regulator Ofgem will now be reviewing the price cap every three months instead of every six months as it currently is, however, there is no forecast for next year right now, but they have warned that it could be tough.
This increase could see household paying around £355 per month instead of £164 per months as the current average, this would mean that twenty-eight million household will be paying an average of over £4,000 per year, this is the biggest fallout of the Russian vs Ukraine war.
Cost of Living Crisis
The recent increases in the cost of living have been extensive. From fuel prices to food, it seems like nothing is safe from inflation's grasp! Recently 91% percent adults reported that they had seen an increase on their expenses between June and July 2022- a statistic which shouldn't come as much surprise given how consistently high rates have risen over time (even reaching 4%).
A result? People are struggling more than ever before; unable or unwilling (or both!) to keep up with these skyrocketing costs while also trying not fall behind financially because then there would be no end paste whatsoever.
James Gilmour is part of a family of five in Essex working in the car industry, who has had to borrow £5,000 just to keep his family afloat after the increase of his energy bills. He was originally paying £145 per month which has now increase to £320, He worked out in a rough estimate that he will be paying over £600 per month by October when the new prices come into effect. He states, “As a family of five we simply cannot afford to pay this, we are already getting halfway into the month with no money left for food and essentials.”
Food & Drink Inflation
Inflation on food and drink has even increased to 10.1%, inflation has not reach double digits since 1982. It is products like milk, bread, cheese, eggs, and cereals that have had a particular impact on prices for everyone weekly shop. Whereas wage increases are not matching up with the cost-of-living increase, the average salary is able to buy 3% less in goods and services than the previous year.
Tax & NI Cuts
Liz Truss, the Secretary of State, has announced her plans to help with the cost-of-living crisis. She announced a £30bn worth of tax cuts that she would implement from day one of her becoming Prime Minister. She plans to scrap the increase in National Insurance that was introduced in April by her rival Rishi Sunak. Truss plans also include getting rid of the planned increase on corporation tax which is currently scheduled for next to increase from 19% to 25% for companies that make profits over £250,000 per year, with the introduction of a small profits rate of 19. In addition to all this she promised to life green levies on energy bills for two years to help with the current energy crises.
How would inflation Effect My Business?
With all the above in mind it is inevitable that small business will also be affected. Whether your business is working from home or your rent somewhere, you will see your own energy cost rising and end up paying more every year. Business that relies on travelling, for example lorry companies or delivery services, will need to factor in the extra money on fuel as well.
If Liz Truss’ plans for scrapping the corporation tax rise for next year fall through, then you will see an uplift in the taxes you’ll be paying in 2023 to 25%. The good news is if everything Truss promises is fulfilled then you and your employees will no longer have to pay the 1.25% increase on National Insurance and your corporation tax bill will stay at the same level of 19%.
There are many changes within the government at the moment, so the only thing we can all do is prepare for the worst and hope for the best, it might be a good idea to start working out a financial plan to deal with any increases that come our way over the remaining part of this year. However, with so much uncertainty around monthly bills, you can strike Debitam off you “Switching Services” List. We will be keeping our prices the same throughout 2022 and will continue to make your business meets tax filing deadlines. Our high-end services levels for our same lower prices.