New business support announced—here’s what you need to know

Jacob Rees-Mogg, the new Business Secretary, has offered fresh support to businesses and public sector organisations in the United Kingdom that are struggling to meet rising energy costs. This assistance comes in addition to the Energy Price Guarantee (EPG) for households, which offers help to families across the country, and the business secretary has described the two as comparable in scope.

All non-domestic customers (including all UK enterprises, the voluntary sector, such as charities, and the public sector, including schools and hospitals) will receive a discount on wholesale gas and electricity rates through a new Government Energy Bill Relief Scheme. This discount will help them to cope with the extreme inflation that has plagued the energy sector throughout this year.

The government has established a Supported Wholesale Price (likely to be less-than half of the wholesale costs forecast this winter) which is expected to be £211 per MWh for electricity and £75 per MWh for gas. All fixed, deemed, variable, and flexible tariffs and contracts entered into on or after April 1, 2022 will be subject to this price cap.

Its initial six-month term will include all non-domestic energy customers from 1 October 2022 through 31 March 2023. In most cases, the cost savings won’t be visible until the November bills, which are for the month of October.

Customers have automatic access to the programme, similar to the EPG for homes, without having to do anything special. Bills will immediately see a reduction in cost (in the form of a drop in cost per kilowatt hour).

To be clear, though, the extent to which individual companies can reduce prices will vary according to the nature of their contracts and other factors.

As long as the fixed pricing contract was agreed upon on or after April 1 of 2022, non-domestic clients will be eligible for assistance. Those on default, presumed, or variable tariffs will have their energy bills reduced on a per-unit basis by an amount up to the difference between the Supported Price and the average projected wholesale price during the duration of the Scheme.

In a statement, the Department for Business, Energy and Industrial Strategy, wrote: “If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly.”

Is your business struggling to cope with increasing energy costs? At JW Hinks, our highly trained team of accountants and business consultants have decades of experience helping companies cut costs and reorganise to adjust to changing circumstances. To find out how we can help your business, contact us on 0121 456 0190.