Energy and Tax Statements this week

We expect two major statements this week from the Government, firstly on help with energy costs and secondly on tax cuts, including stamp duty.

Parliament briefly returns to business between the end of the period of mourning for HM the Queen and the recess for party conferences this Friday.

Wednesday 21 September

See our subsequent article - Energy bills help for businesses unveiled

In advance of the Fiscal event on Friday, it is understood that the Business Secretary, Jacob Rees-Mogg, will announce on Wednesday details of the financial help for businesses with their energy costs.

The package of measures is expected to be ready by October, but if it is November the Government has said it will be backdated to October.

This comes on top of the initial announcement on 8 September of an Energy Price Guarantee with a support package for households of two years and businesses six months with possible extensions.

See also the Energy Support factsheet updated on 9 September.

Friday 23 September

The new Chancellor will deliver a ‘fiscal statement’ or ‘emergency mini-Budget’ on Friday 23 September.

The statement may provide further information around the Energy Price Guarantee but is expected to more widely cover the following:

Reversing the recent NIC increase from 6 November 2022
Cancellation of the proposed Corporation Tax Rise from 19% to 25% on 1 April 2023
Cutting stamp duty to allow more people to move and help first-time buyers on to the property ladder.
Temporary cut in business rates
Temporary axing of green levies from fuel bills

November Budget

A further, full Budget is expected later in the year to cover Office of Budget Responsibility forecasts and the 2023/24 tax year rates. The focus will be on boosting economic growth, and may include:

Temporary cut in the rate of VAT (if not in the Emergency Budget) - this may be in general or sector specific such as hospitality
Possible acceleration of the proposed 2024 income tax cut of 1%
Unfreezing of personal tax thresholds to remove fiscal drag
Creation of 12 special investment zones across the UK with discounts on employer NICs
Package of deregulation measures to stimulate growth
Reforms to R&D tax credits to boost investment
Changes to the Super Deduction and the Annual Investment Allowance
A review of IR35 and the off-payroll working rules
Review of family taxation, e.g. making the income tax personal allowance fully transferable between couples (not just 10%). This could be restricted to those with caring responsibilities.

Enterprise Investment Scheme

In addition to the above, the Treasury is being urged to act now to secure the future of the Enterprise Investment Scheme (EIS) that is used for funding start-ups. EIS was established in 1994 to encourage investors to back start-ups by offering favourable income and capital gains tax reliefs.

The scheme is potentially under threat as EU state aid rules require a sunset clause to ensure tax reliefs end in April 2025, unless the government passes an extension. The Seed Enterprise Investment Scheme for smaller companies is not affected.