New Chancellor Kwasi Kwarteng found himself firmly in the spotlight as he delivered a mini-Budget that saw the pound crashing to a new 37-year low.

The winners and losers were left to reflect on the announcements as the Chancellor delivered a package of tax cuts worth £45 billion in an attempt to boost the UK’s economic growth.

A lot of the changes had already been forecast in the days running up to Friday’s Westminster statement, but scrapping the 45 per cent additional rate of income tax was unexpected.

Mr Kwarteng told MPs: “The additional rate of income tax at 45 per cent is currently higher than the headline top rate at G7 countries like the US and Italy, and it is even higher than social democracies like Norway.

“But I am not going to cut the additional rate of tax today, Mr Speaker, I am going to abolish it altogether. From April 2023, we will have a single higher rate of income tax of 40 per cent.”

The Chancellor also stopped the planned increase from 19 per cent to 25 per cent on corporation tax; scrapped the 1.25 per cent increase to National Insurance that was due to come in in November; and said there would be a permanent cut to stamp duty.

There will be no duty to pay up to £250,000, while for first-time buyers this goes up from £300,000 to £425,000.

He continued his list of announcements by lifting the cap on bankers’ bonuses and bringing forward the planned 1p reduction to the basic rate of income tax. This was due to happen in 2024, but will now go ahead next year, although not in Scotland.

The Government has indicated that 31 million people will enjoy an average £170 a year reduction in their tax with this move.

Given the ongoing cost-of-living crisis, do you think the mini-Budget has provided any answers for cash-strapped families? What would you like to have seen included?

Businesses have been given a helping hand by the Government to cope with the dramatic rise in energy prices as a new winter of discontent looms.

Through a new Energy Bill Relief Scheme, the Government will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector, including charities, and the public sector such as schools and hospitals) whose current gas and electricity prices have been significantly inflated in light of global energy prices.

This support will be equivalent to the Energy Price Guarantee put in place for households.

Business Secretary Jacob Rees-Mogg said: “We have seen an unprecedented rise in energy prices following Putin’s illegal war in Ukraine, which has affected consumers up and down the country and businesses of all sizes.

“The help we are already putting in place will save families money off their bills, and the Government’s plans for businesses, charities and public sector organisations will give them the equivalent level of support.

“This, alongside the measures we are taking to boost the amount of domestic energy we produce to improve both energy security and supply, will increase growth, protect jobs and support families with their cost of living this winter.”

The Scheme will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.

As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support that will automatically be applied to bills.

To administer support, the Government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter – which is a discounted price per unit of gas and electricity. This is equivalent to the wholesale element of the Energy Price Guarantee for households. It includes the removal of green levies paid by non-domestic customers who receive support under the scheme.

The level of price reduction for each business will vary depending on contract type and circumstances.

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.

Prime Minister Liz Truss said: “I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.

“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.

“At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”

A summary of the main tax changes that will impact the liability of individuals and business owners from April 2023 are:

• A reduction in the Income Tax basic rate from 20% to 19%.

• The abolition of the 45% additional Income Tax rate.

• The cancellation of the proposed increase in Corporation Tax. The rate will now remain at 19%.

• The withdrawal of the Health and Social Care Levy of 1.25%.

• The tax rates on dividend income for 2022-23 were increased to mirror the increases in     NIC rates (1.25 percentage points). In line with the withdrawal of the Health and Social     Care Levy from April 2023 and the abolition of the 45% Income Tax Band from the             same date, the rates of dividend tax from April 2023 will be:

       a.The first £2,000 of dividends will remain tax-free.

       b.Dividends that form part of the basic rate Income Tax band will taxed at 7.5%

       c. Dividends that form part of the higher rate Income Tax Band will be taxed at 32.5%.

• The Chancellor announced a permanent increase in the SDLT nil rate band to £250,000 (from £125,000) with immediate effect from the date of his announcement, 23 September 2022.

• Prior to the announcement, no SDLT was payable for first-time buyers making a purchase of up to £300,000. This limit has now been increased by £125,000 with immediate effect to £425,000. The first-time buyer’s relief also increases the nil-rate threshold to £425,000 (£300,000 prior to 23 September 2022) for first-time buyers of properties costing up to £625,000 (£500,000 prior to 23 September 2022). There is no relief available for first-time buyers spending more than £625,000 on a property. There are a number of requirements that must be met in order to qualify for the relief.

• The present Annual Investment Allowance that provides a 100% tax deduction for qualifying capital investments is now permanently capped at expenditure of £1m. This cap was due to reduce to £200,000 from 31 March 2023.

Heinz. Cadbury. Coca-Cola. Being household names isn’t the only thing they have in common.

All three were awarded the Royal Warrant, and were able to display the Royal Arms on their products. Following the death of Her Majesty Queen Elizabeth II, these companies – and around 600 more – will have to stop using the Arms.

The Royal Warrant is awarded to companies that supply products and services to the monarch. For some holders, this will be the first time they have found themselves in the situation of potentially having to remove the iconic image from their products.

Businesses will have two years to remove them – unless King Charles decides to reissue the Royal Warrant.

This is just one of the ways businesses will be affected over the coming months by the passing of the Queen.

One of the biggest changes to come in during the next few years will be new currency bearing the head of King Charles. There has even been suggestions that the minting of new coins may see the end of the smaller denominations given the cost of producing them.

For now, all coins and notes in existence will remain legal tender – although there were already plans in place to withdraw paper £20 and £50 notes on September 30, unconnected with recent events.

The Bank of England has said an announcement regarding the change will follow the Queen’s state funeral. It is likely that the new currency will begin circulation with the existing coins and notes gradually being phased out over an extended period.

Similarly, there will be new stamps to supersede the ones showing the Queen’s head. New post boxes will also carry the King’s mark.

Countries across the Commonwealth, including Canada, Australia and New Zealand, will be facing similar transition periods.

Business owners could be facing a difficult few months as the cost-of-living crisis continues to bite alongside the predicted winter recession.

After overcoming the difficulties associated with COVID-19, it seems there hasn’t been much opportunity to steady the ship before the next tidal wave of challenges washes over us.

The worst thing businesses can do is bury their head in the sand. It’s important to be prepared and take steps to maintain profitability and stay solvent.

Take time to consider some of these options:

• If you sell goods or services that are in demand or if you offer after-sales care that your competitors may not offer, then you may be able to generate additional income, and therefore profit, by simply increasing your prices.
• Could you create cross-sales opportunities by offering deals to your present clients and customers?
• Could you lock customers into longer-term contracts by offering them incentives – no price increases for a fixed term, for example.
• A line-by-line review of your business costs is always instructive. Which costs could you reduce or replace with lower cost alternatives?
• Ask you bookkeeper to make a comprehensive list of costs you settle with your business credit card or by standing order or direct debit. These costs tend to be forgotten and many renew automatically even though you may no longer use the services paid for.
• Improve credit control to convert sales into cash more quickly.
• Monitor cash flow for at least the coming year to identify low points and organise funding.
• Produce monthly management accounts, even basic reports from most accounts software will confirm trading results (profitability) and produce a balance sheet (that will measure solvency).
• Keep an eye on competitors’ websites and published price lists; are your prices higher or lower, how will you respond?
• Do you have slow-moving stock that could be sold at a reduced price to increase cashflow?
• When considering your management accounts make sure you factor in deductions for current taxation.
• When did you last invest in tax planning advice? There may be an opportunity, or opportunities, to create recurring tax savings.
• Approach HMRC and apply for their Help to Pay assistance. This won’t reduce taxes due, but it will help you spread the cash flow impact of payments.

Do you need some advice? Get in touch with us to discuss your options.