HMRC has reversed its controversial changes to the tax treatment of members of limited liability partnerships (LLPs), which had raised concerns about potential retrospective tax liabilities. In an email seen by the FT, HMRC said: “The amended guidance will, in effect, reverse the changes that were made in February 2024.” Before the new changes, members were taxed as employees unless they had a significant variable profit share, significant influence over the LLP, or made a substantial capital contribution (at least 25% of annual fixed compensation). However, the new guidance disregarded the capital contributions exemption, leaving many members who had not been paying National Insurance contributions liable to be charged the tax. The shift was welcomed by the British Private Equity & Venture Capital Association and the Chartered Institute of Taxation. HMRC’s new guidance clarifies that genuine capital contributions to limited partnerships will not trigger anti-avoidance rules.

HMRC has been aware of significant fraud and errors in the research and development (R&D) tax credit scheme since 2017, yet failed to act, resulting in a loss of £4.1bn to taxpayers since 2020. An internal report disclosed to the Times revealed that “these threats are not new” and highlighted a “failure of governance” that allowed loopholes to persist. Despite previous assessments indicating “almost certain” fraud, it was only after media scrutiny in October 2022 that HMRC began to take serious measures. The agency has since stated it has “significantly increased the number of people working on R&D compliance”.

The Treasury has rejected a compromise proposed by farming groups to mitigate the impact of inheritance tax reforms on the agricultural sector. Despite pressure, Treasury minister James Murray and farming minister Daniel Zeichner confirmed that the Government would not alter its stance. NFU president Tom Bradshaw expressed the industry’s frustration, stating: “The reaction from our members is going to be one of fury, one of real anger.” The proposed clawback mechanism, suggested by tax lawyer Dan Neidle, aimed to protect family farms while still generating revenue. The reforms, effective from April 2026, will impose a 20% levy on agricultural land above a threshold of £1.3m to £3m. The decision has ignited political backlash and protests from farmers, with opposition parties aligning with their concerns.

Corporate insolvencies in the UK have reached a 16-year high, with 1,971 businesses going under in January, marking a 10.7% increase from the previous year. Tim Cooper, president of R3, said: “Directors may be choosing to close down their firms after years of challenging trading conditions.” The surge is attributed to rising costs from Rachel Reeves’s £25bn tax raid, which includes higher National Insurance contributions and a 6.7% increase in the National Living Wage, set to take effect in April. The hospitality sector alone saw a drop of 58,000 jobs, contributing to a total loss of over 94,000 jobs in critical retail and service industries. Meanwhile, the number of people going financially insolvent across England and Wales jumped by 12% in January compared with the same month a year earlier, according to Insolvency Service figures.

According to a report from the women and equalities committee, Britain is grappling with a “pervasively ageist culture” that discriminates against older individuals in various sectors, including the workplace and media. The report criticises the political narrative surrounding the elderly, labelling terms like “grey tsunami” as harmful. It highlights that while age discrimination is legally protected, it is often viewed as less serious than other forms of discrimination. John Kirkpatrick, chief executive of the Equalities and Human Rights Commission, stated that the current laws are ineffective. The report urges the government to enhance protections against age discrimination and learn from Wales’ approach to older people’s representation. Sarah Owen, chairwoman of the committee, emphasised the need for a stronger voice for older individuals in policy-making.

Recent data from the Office for National Statistics (ONS) reveals that UK earnings growth has increased for three consecutive months, with average regular pay rising to 5.9% in the three months leading up to December. The growth surpasses Consumer Prices Index inflation by 3.4%. Job vacancies decreased by 9,000, totalling 819,000, raising concerns about the job market’s stability. However, workers on payrolls increased by an estimated 21,000 during January to 30.4m, following a decline of 14,000 in December. Economists warn that this positive trend may be “short-lived,” with Suren Thiru from the Institute of Chartered Accountants in England and Wales pointing to the potential impact on employers of rising National Insurance contributions and a struggling economy.

Hiring for diversity equity and inclusion (DEI) roles in the UK has plummeted 70% in the last three years, figures show. Data compiled for the Telegraph by Adzuna, the job site, found vacancies for dedicated DEI roles had fallen by a third since last year – dropping from a peak of 677 in February 2022 to 208 in January this year. Despite employers in both the public and private sectors turning away from DEI, the NHS is defying ministers by continuing to hire diversity officers. Nigel Farage, leader of Reform UK, said he was “delighted” at the decline in DEI roles but added that the “madness is still alive and well” in the financial and health industries. He said: “If you look at guidelines published by the Financial Conduct Authority, you’ll see they’re still insisting on all this rubbish.”

An analysis by the Business & Human Rights Resource Centre (BHRRC) has revealed that 665 cases of alleged abuse against migrant workers were reported in 2024, involving 489 companies, including Meta, Uber, and Deliveroo. The report highlights that at least 218 migrant workers died due to corporate neglect, with 71 cases linked to health and safety breaches. John Lewis said the two cases it was linked to in the analysis were associated with an ongoing investigation at a factory in Jordan, which does not supply its own brand products but two brands widely stocked at a number of retailers. Isobel Archer, BHRRC’s senior researcher in labour and migrant worker rights, commented: “The reported cases we have tracked are almost certainly only the tip of the iceberg. We continue to see resilience among migrant workers fighting for and demanding their rights in the most egregious conditions, and the onus is on companies to right these wrongs.”

Rachel Reeves is urging cabinet ministers to conduct a comprehensive audit of Britain’s approximately 130 regulators to assess their effectiveness in promoting economic growth. The Chancellor has expressed a desire to reduce red tape, but the Telegraph points out that Labour has introduced five new regulatory bodies since taking office in July. Shadow Business Secretary Andrew Griffith commented: “Businesses would absolutely welcome far fewer regulators but I’m afraid growing public sector jobs is in Labour’s DNA.”

Fintech investment in the UK has reached a four-year low, with KPMG’s bi-annual report revealing a 27% drop to £7.9bn in 2024, down from £10.1bn in 2023. Despite this decline, the UK still attracted more funding than France, Germany, China, India, Brazil, and Canada combined. The report attributes the downturn to geopolitical uncertainty, high inflation, and elevated interest rates. KPMG’s Hannah Dobson noted that while 2024 was challenging, there are “signs of a slow recovery,” although regulatory challenges persist.

Thames Water has received approval to borrow £3bn to avert imminent collapse, a decision described by Mr Justice Leech as “eye-watering”. The High Court ruling allows the company, which serves 16m households, to secure funding for another year while it seeks new investors. However, the loan comes with a steep 9.75% interest rate, potentially adding £800m in extra payments over its 2.5-year term. Critics, including Liberal Democrat MP Charlie Maynard, argue that this is a “futile, expensive, and extremely short-term bail out” and have vowed to appeal the ruling. Despite the financial lifeline, campaigners warn that Thames Water’s underlying business model is flawed, with Matthew Topham from We Own It stating: “The reason they’re getting bailed out is because they ran out of other people’s money to line their pockets with.”

Recent data from the Office for National Statistics (ONS) reveals that UK earnings growth has increased for three consecutive months, with average regular pay rising to 5.9% in the three months leading up to December. The growth surpasses CPI inflation by 3.4%. Despite this, Bank of England Governor Andrew Bailey said the central bank remained on track to cut interest rates again this year. “Pay growth went up, but actually not quite as much as we were expecting,” he said at an event in Brussels. Moreover, the Bank’s own surveys indicate that wage pressures would ease in the coming year.

The search for a new CEO to manage Norway’s Government Pension Fund Global, valued at NKr20trn (£1.4trn), has attracted 82 applicants, including a comedian and 18 teenagers. Nicolai Tangen, the current CEO, has reapplied for the position, alongside notable candidates like former finance minister Erlend Grimstad and economics professor Jacob Bjorheim. The average age of applicants is 29, with the youngest being 16. Tangen, who has been popular for his contrarian trading approach and podcast, is expected to be reappointed.