We may still have the same Government in power but today’s announcement of Liz Truss as the new Prime Minister may feel like we have a whole new administration ruling the country.
We expect that a new Cabinet will be announced in the coming days, with confirmation of an Autumn Budget shortly after. Although, given the mounting calls for immediate support for consumers and businesses, there may be press conferences or statements in the House of Commons much sooner.
Both candidates were continually quizzed about the soaring inflation and rising cost of living situation during these past few weeks of campaigning, although both remained fairly coy about their planned interventions. However, the new Prime Minister will now be expected to be more transparent and hopefully there will be some bold and positive policies.
The CBI’s research has found that 69% of firms expect their energy costs to increase in the next three months, and they have set out a 3 point plan of suggestions for the new Prime Minister. This includes expanding the Recovery Loan Scheme, instructing HMRC to repeat the flexible stance it took during the pandemic for Time to Pay and announcing a business rates freeze.
The FSB has offered suggestions to the new Prime Minister including a discretionary grant on business rates, reducing VAT on energy bills, introducing a green voucher scheme and extending the consumer price cap to the smallest businesses.
So far, the business policies announced by Liz Truss have been:
- To reverse the NHSC Levy on wages
- A VAT cut on energy bills
- Suspend the green levy while still committing to the UK’s legally binding goal of reaching net zero emissions by 2050
- Introducing legislation to prevent strikes in more sectors to ensure minimum service levels on critical areas of national infrastructure
Kirsty McGregor, accountant-in-residence at capitalise, explains her views for small businesses: “Few businesses would benefit from a VAT cut on energy bills and any grant administered through the local authorities would most likely be cumbersome and not reach businesses quickly enough.
“I think extending the consumer price cap to small businesses or higher energy users could be a more efficient action and temporarily stalling the NHSC Levy would be welcomed by all employers as an immediate cost saving of 1.25%. But time will tell what exciting ideas our new Prime Minister has.”
The latest Future Positive Podcast included a discussion about HMRC’s current Time to Pay policies, listen in to find out the key trends and how HMRC is liasing with businesses.
Or click here to find the tools you can grab now to help you take more control of business finance and stay ahead of the changing economy.