Andy Burnham’s first tax announcement as Prime Minister has focused on reducing household electricity costs. For business owners, however, the immediate impact is limited because the confirmed VAT cut applies to domestic electricity rather than commercial energy use.
The more important questions concern what may come next. Business rates reform, regional tax powers and future Budget decisions could all affect costs, cash flow and business planning.
This guide explains what has been confirmed, what remains uncertain and what business owners should do now.
What Has Andy Burnham Announced So Far?
The first confirmed tax measure is the removal of VAT from household electricity bills from 1 October 2026.
The change is intended to reduce household energy costs and applies to domestic electricity bills. For most businesses, it does not create an immediate tax saving.
Commercial electricity supplies are treated differently from domestic energy, so businesses should not assume that their own electricity bills will fall because of this announcement.
The key point is simple: this measure is aimed at households, not businesses.
There is currently no need to adjust VAT returns, payroll, bookkeeping or Corporation Tax calculations because of it.
Business owners should continue following the tax rules already in force unless HMRC or the Treasury confirms a change.
Why Business Rates Are An Important Area To Watch
Business rates remain an important issue for shops, pubs, restaurants, offices and other businesses with commercial premises.
Before becoming Prime Minister, Andy Burnham proposed reforming business rates to better support high streets and smaller businesses. However, these proposals are not yet confirmed tax changes.
Future reforms could affect:
- Small Business Rates Relief
- the amount paid by high-street businesses
- how business rates are shared between smaller and larger commercial properties
Until further details are announced, businesses should avoid assuming their business rates will change.
Existing Business Rates Support
Some business rates changes were already introduced for the 2026 to 2027 financial year.
Eligible retail, hospitality and leisure properties with a rateable value below £500,000 benefit from lower multipliers, while larger properties pay a higher multiplier.
Eligible pubs and live music venues also receive additional business rates relief.
These existing measures should not be confused with any future policies introduced by the new Government.
Could More Tax Powers Be Given To Local Mayors?
Another proposal under discussion is fiscal devolution, which would give regional or local authorities more control over certain taxes or business rates revenue.
For businesses, the effect would depend on the final policy. Possible outcomes could include:
- more locally targeted business support
- regional investment funded through retained tax revenue
- different priorities between local areas
- changes in how business rates income is allocated
At present, these ideas remain part of a wider policy discussion. Businesses do not need to take action unless firm proposals are confirmed.
What Could Future Tax Changes Mean For Businesses?
The effect of any future tax package will depend on the type of business you run.
Businesses With Commercial Premises
Shops, pubs, salons, offices and other premises-based businesses should pay close attention to business rates announcements.
Changes to relief thresholds, valuations or multipliers could affect fixed costs and cash flow.
Businesses should check that:
- their rateable value is accurate
- any available relief has been applied
- their property details are correct
- future budgets allow for reliefs that may end or change
Employers
Employers should watch for announcements affecting payroll costs, National Insurance or employee benefits.
Until a new policy is confirmed, payroll should continue to be calculated under the current rules.
It is usually unwise to delay recruitment or change salary arrangements based only on political speculation.
Limited Companies
Limited companies should continue planning around existing Corporation Tax rules, allowable expenses and filing deadlines.
A future Budget may introduce changes, but no adjustments should be made until the details are confirmed.
Accurate records make it easier to model the effect of any new policy. CG Accounting’s guidance on Corporation Tax and company accounts explains the responsibilities limited companies must continue to meet.
Sole Traders And Partnerships
Sole traders and partnerships may be affected by future changes to Income Tax, National Insurance, allowable expenses or business rates.
For now, the most useful step is to keep bookkeeping up to date and maintain a realistic tax reserve.
Clear records help you understand whether a future tax change will genuinely affect your take-home income.
Five Practical Steps Businesses Can Take Now
Businesses do not need to react hastily, but they can prepare sensibly.
1. Separate Confirmed Changes From Proposals
Check whether an announcement is:
- a political intention
- a consultation
- a Treasury publication
- draft legislation
- a measure that has passed into law
Only confirmed measures with clear implementation dates should be built into formal tax planning.
2. Keep Your Bookkeeping Current
Up-to-date bookkeeping gives you a reliable view of cash flow, payroll costs, tax liabilities, overheads and available reserves.
This makes it easier to assess the real impact of a new tax measure.
CG Accounting’s bookkeeping support can help businesses maintain clear financial records throughout the year.
3. Review Your Fixed Costs
Businesses operating from premises should regularly review:
- business rates
- rent
- utilities
- insurance
- finance repayments
- staffing costs
The aim is not to cut costs immediately, but to understand where the business may face pressure if taxes or reliefs change.
4. Avoid Acting On Headlines
Headlines often simplify tax announcements.
For example, “VAT removed from electricity bills” may sound as though every electricity customer will benefit. In this case, the confirmed measure relates to domestic electricity.
Always check who a change applies to, when it begins and whether any exclusions exist.
5. Model Different Outcomes
A simple forecast can show what may happen if:
- business rates rise or fall
- employer costs change
- tax payments increase
- a relief ends
- customer spending changes
Scenario planning does not require predicting Government policy. It simply helps the business remain prepared.
What Should Businesses Look Out For Next?
The next major point of clarity is likely to come through a formal Budget, Treasury publication or new legislation.
Business owners should watch for:
- the next Budget date
- HMRC guidance
- Treasury policy papers
- draft Finance Bill measures
- confirmed implementation dates
- eligibility rules for any relief
Announcements made in speeches or interviews can indicate the Government’s direction, but detailed rules determine the real financial effect.
Businesses should also remember that some measures may apply only in England, while others may operate differently in Scotland, Wales or Northern Ireland.
Common Questions About Andy Burnham’s Tax Plans
Has Andy Burnham Cut VAT For Businesses?
No. The first confirmed VAT announcement applies to domestic electricity bills. It is not a general VAT cut for businesses.
Will Business Energy Bills Become Cheaper?
The domestic electricity VAT announcement does not automatically reduce commercial energy bills.
Businesses should continue budgeting under their current energy contracts unless a separate measure is confirmed.
Are Business Rates Changing Again?
Business rates have already changed for the 2026 to 2027 financial year, including new multipliers and sector-specific support.
Further reform may be considered, but businesses should wait for confirmed policy details before assuming their bill will change.
Should I Change My Business Plans Now?
Not solely because of the current announcement.
Continue following existing tax rules, maintain accurate records and review your forecasts. Major changes to hiring, investment or company structure should be based on confirmed rules.
Could Regional Tax Powers Affect My Business?
Potentially, but the effect would depend on which powers were devolved and how they were used.
No immediate action is required while these proposals remain under discussion.
Stay Prepared Without Acting On Speculation
Andy Burnham’s first confirmed tax announcement provides support for households rather than a direct tax saving for businesses.
For business owners, the most relevant areas to watch are business rates reform, regional tax policy and any measures announced through the next Budget.
The sensible approach is to stay informed, maintain accurate accounts and avoid making decisions until the rules are confirmed.
CG Accounting Services Ltd has 10+ years’ experience helping businesses understand their figures and meet their tax responsibilities in plain English. For guidance on how confirmed tax changes may affect your business, contact CG Accounting Services.