Welcome to the February 2023 Newsletter from Walsh & Co

From April 2023, businesses will receive reduced support with their energy bills in a government attempt to slash gas and electricity bill compensation costs.

Meanwhile, a consultation on simplifying the R&D tax relief system has been launched to help 'drive innovation and grow the economy'.

Energy bill support for firms to be reduced from April

Businesses will receive reduced support with their energy bills from April as the UK government attempts to cut the cost of compensating for soaring gas and electricity prices, the Treasury has confirmed.

The Treasury said that the government would provide £5.5 billion of 'transitional support' for businesses over 12 months from 1 April 2023.

Under the new scheme, firms will get a discount on wholesale prices rather than costs being capped as under the current one. Bills will automatically be discounted by up to £6.97 per megawatt hour (MWh) for gas bills and by up to £19.61 per MWh for electricity bills, a statement said.

Heavy energy-using sectors, like glass, ceramics and steelmakers will get a larger discount than others, but firms will only benefit from the scheme when energy bills are high.

The energy support scheme is mainly used by businesses, but is also for charities and public sector organisations such as schools and hospitals.

Chancellor Jeremy Hunt said: 'My top priority is tackling the rising cost of living – something that both families and businesses are struggling with.

'That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able.'

Government launches consultation on R&D relief

The government has launched a consultation on simplifying the UK's research and development (R&D) tax relief system, driving innovation and growing the economy.

The consultation runs to 13 March 2023 and sets out proposals on how a single scheme could be designed and implemented.

This would replace the two R&D tax relief schemes currently in place – the Research and Development Expenditure Credit (RDEC) scheme and the small and medium enterprises (SME) R&D relief.

This is part of the government's ongoing R&D tax reliefs review, and follows changes announced at Autumn Statement 2022 where the generosities of the two R&D tax schemes were broadly aligned.

Victoria Atkins MP, Financial Secretary to the Treasury, said: 'We are focussed on growing the economy – with thriving businesses bringing more jobs, higher pay and more tax revenue to fund our precious public services.

'Getting R&D tax relief right and fit for the future sits at the heart of making sure the UK remains a competitive location for cutting edge research – helping new firms grow.

'I welcome views on the option to simplify the scheme, especially from those who have experience of the existing tax reliefs.'

The consultation can be accessed here.

ESSENTIAL TAX DATES FOR FEBRUARY

2 February
Deadline for submitting P46(Car) for employees whose car/fuel benefits changed during the quarter to 5 January 2023.

19 February
PAYE, Student loan and CIS deductions are due for the month to 5 February 2023.

QUOTE OF THE MONTH

'As a country, we cannot afford to have a repeat of the post-credit crunch scenario, where the dreams of thousands of entrepreneurs and business owners were crushed by a withdrawal of finance options, leaving them unable to continue and deepening the UK's economic woes.'

Martin McTague, National Chair of the Federation of Small Businesses (FSB), commenting on a report published by the business group that found that many small firms in the UK face challenges when it comes to finding and applying for funding.

ON OUR WEBSITE

A wealth of resources for businesses
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