Rising costs are one of the greatest challenges facing all small businesses, with soaring energy costs particularly concerning for performing arts companies
The extension of the Energy Bill Relief Scheme to cover businesses from October 2022 through March 2023 should help – but companies still need to plan appropriately for the year ahead.
Are you confident that your business can weather the times? Scenario planning, sensitivity analysis, and cash flow forecasting are key tools to help companies navigate through uncertain times. Whether you’re a theatre or a production company, you must understand the financials to make the best decisions to move forward successfully.
Although the Energy Bill Relief Scheme reduces bills for businesses over the six-month period, the costs will still be much higher than this time last year. And these costs will be unsustainable for some Performing Arts organisations still reeling from the impact of Covid.
Your accountant can be an invaluable partner in providing the required analysis and in helping to set both strategic and tactical plans. If you need additional expertise to confidently plan for the future, Atek Accounting can help. We have a passion for working with the performing arts industry and can help you get control of your finances to move forward with confidence.
An overview of the Energy Bill Relief Scheme
Under the government’s support package, wholesale energy prices for businesses will be capped at “less than half” of the anticipated winter levels. The Energy Bill Relief Scheme offers discounts for all firms for six months starting on October 1 October.
Under the scheme revealed by the Department for Business, Energy and Industry (BEIS), wholesale prices are expected to be fixed for all non-domestic energy customers at £211 per MWh for electricity and £75 per MWh for gas.
Firms do not need to contact suppliers, as the discount will automatically be applied to bills. The scheme applies to fixed contracts agreed before or after April 1; as well as to variable, flexible tariffs and contracts.
Performing Arts organisations that are eligible for the Energy Bill Relief:
The scheme will be available to everyone on a non-domestic contract, including:
- Businesses.
- Voluntary sector organisations, such as charities.
- Public-sector organisations such as schools, hospitals, and care homes.
Who are:
- On existing fixed-price contracts that were agreed on or after December 1, 2021.
- Signing new fixed-price contracts.
- On deemed out-of contract or variable tariffs.
- On flexible payment or similar contracts.
Note: non-domestic consumers must not profit from the scheme –for example, by generating power that is being sold back into the grid.
What does the relief mean to you in £s?
The government-supported price has been set at:
– £211 per megawatt hour (MWh) for electricity
– £75 per MWh for gas
Fixed contracts: the discount will reflect the difference between the government-supported price above and the relevant wholesale price for the day the contract was agreed (wholesale prices being used (for each day from December 1, 2021) will be published by the government).
The variable deemed and all other contracts: the discount will reflect the difference between the government-supported price above and the relevant wholesale price but be subject to a “maximum discount” (£345/MWh for electricity and £91/MWh for gas).
Kate Nicholls, CEO of UKHospitality, said: “This intervention is unprecedented, and it is extremely welcome that the government has listened to hospitality businesses facing an uncertain winter. We particularly welcome its inclusiveness – from the smallest companies to the largest – all of which combine to provide a huge number of jobs, which are now much more secure.”
“The government has recognised the vulnerability of hospitality as a sector, and we will continue to work with the government to ensure that there is no cliff edge when these measures fall away.”
Empowering small businesses and the performing arts industry
Covering Surrey and London from our base in Weybridge, we offer a wide range of accounting services, specialising in supporting small businesses to get control of their finances, improve efficiency, and grow – with expert advice and support every step of the way.
With a passion for serving the Performing Arts industry, we have the expertise and resources to offer a variety of accounting services to help you weather the times. Contact us for an initial chat to see how we can help.
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