Autumn Statement: An Insolvency and Restructuring Perspective

Posted on Nov 18, 2022. by NTI

The dust has settled and the sun rose this morning. We have heard from Betty of Maidenhead and Roz from Stockport. Now is the opportunity to see Mr Hunt's Autumn Statement from an insolvency and restructuring perspective, as there are many points we can apply to our jobs in the sector.

Take Business Rates; £13.6 billion of changes are projected over the next five years to relieve the burden of business rates for businesses and the high street, as well as to protect them (marginally) from the full impact of inflation. This follows the temporary 50 per cent Business Rates Relief announced in the Spring Statement 2022, worth £1.7 billion. It won't be enough and will certainly not be properly targeted (we imagine) and we will report the fallout from this next week, as and when it comes in.

More interestingly, business rate bills in England will be updated from 1 April 2023 to reflect changes in property values since the last revaluation in 2017. The package of targeted support for businesses as they transition to their new bills includes:

1   A transitional relief scheme:

* bill increases caused by changes in rateable values at the 2023 revaluation will be capped in order to support properties;

* the ‘upward caps’ will be 5%, 15% and 30% for small, medium and large properties in 2023-24 respectively and will be applied before any other reliefs or supplements

* HM Treasury highlighted that this scheme, worth £1.6 billion, will be funded by the Exchequer rather than by limiting bill decreases

2   A continued freeze to business rates multipliers:

* business rates multipliers will be frozen in 2023-24 at 49.9p and 51.2p

* HMT highlighted that that this freeze will support all ratepayers and bills will be 6% lower than without the freeze

3   Supporting Small Business Scheme

* bill increases will be capped at £600 per year from 1 April 2023 for small businesses losing eligibility or seeing reductions in Small Business Rate Relief or Rural Rate Relief

* this means that a small business losing eligibility for either of those reliefs will have a bill increase of more than £50 per month in 2023-24

4   A retail, hospitality, and leisure relief:

* support for eligible retail, hospitality, and leisure businesses has been extended and increased from 50% to 75% business rates relief up to £110,000 per business in 2023-24

5   Improvement relief:

* the 100% improvement relief announced in the Autumn Budget 2021 to support investment in property improvements will now be introduced from April 2024, rather than 2023, and reviewed in 2028

Annual Investment Allowance: The Treasury announced that from 1 April 2023, the Annual Investment Allowance will be increased to a permanent level of £1 million. This measure is anticipated to cover expensing for 99 per cent of UK businesses, meaning that costs of qualifying plant machinery investments can be written off in one go. This will make tax more straightforward for businesses investing between £200,000 and £1 million.

Energy Bill Relief Scheme: Following the announcement in the Growth Plan of September 2022 of the temporary six-month Energy Bill Relief Scheme, the Treasury confirmed its review of the Scheme to determine support for non-domestic energy consumers beyond 31 March 2023 with the findings to be published by 31 December 2022.

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