11 October 2022
R&I Update - October 2022 – 3 of 5 Insights
Since 2021, soaring wholesale energy costs have caused concern for businesses already battling a difficult economic climate with wider inflationary pressures, such as higher interest rates.
The government's mini-budget on 23 September 2022 cancelled the planned increase in the corporate tax rate (the proposed increase from 19% to 25%). This will assist those companies which are profit-making, but without support to reduce the cost base, this provides limited relief to others.
There is some good news, the department for Business, Energy and Industrial Strategy has announced that wholesale electricity and gas costs will be capped at a 50% discount on prices forecast for winter. The cap came into force on 1 October 2022 and will last six months. Even so, some companies will still be paying substantially more for their electricity and gas than they were a year ago and directors are having to make important decisions regarding the future of their businesses.
To discuss the issues raised in this article in more detail, please reach out to a member of our Restructuring & Insolvency team.
11 October 2022
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