Government urged to support SME growth

The Government has been urged to support the growth ambitions of small and medium-sized (SME) manufacturers, as a new report from Make UK and Civitas suggests that achieving their targets could provide an £83bn boost to the UK economy. Currently ranked 12th globally, the UK manufacturing sector could rise to 7th with the right support. Key barriers to growth include shortages in engineering skills and access to finance, with 80% of SMEs facing challenges in securing funding during critical early stages. Make UK’s chief executive, Stephen Phipson, stressed the need for improved accessibility to skills, stating: “Small and medium sized businesses already play a significant part in contributing to growth but, with the right support, they could do even more.” The report also calls for a 150% capital allowance and an enhanced Growth Enterprise Scheme to facilitate SME development.

Retailers prepare to pass on higher costs to consumers

According to a recent survey by the British Retail Consortium, British retailers are expected to increase prices in the coming months due to rising employment costs. In February, shop prices were 0.7% lower than the previous year, but saw a monthly increase of 0.4%, marking the largest rise in a year. BRC chief executive Helen Dickinson said: “We expect food prices to be over 4% up by the second half of the year,” as retailers face an annual cost increase of £7bn due to a nearly 7% rise in the minimum wage and other tax changes. The report also noted that food inflation rose to 2.1%, with expectations of further increases driven by climbing global coffee prices.

Labour moves to extend protections for workers

The Government has announced a series of changes to the Employment Rights Bill, which Labour says will provide “the biggest upgrade to workers’ rights in a generation.” Business Secretary Jonathan Reynolds revealed that the bill will include around 250 amendments following extensive consultations. Key changes include entitlement to sick pay from the first day of illness, protections against unfair dismissal from day one, and new regulations for zero-hours contracts, which will also apply to agency staff. Unison general secretary, Christina McAnea, said there were huge improvements that had been made to the bill, saying it was “what working people and decent employers have been waiting for.” However, concerns have been raised by Martin McTague, chair of the Federation of Small Businesses, who noted that 92% of members are “very concerned” about the bill’s implications for hiring.

High earners miss out on £1bn tax relief

Analysis reveals that over 2.3m high-income savers are missing out on more than £1bn of tax relief on pension contributions. Research from InvestEngine shows that 56% of workers in higher tax bands have a personal pension, yet 46% do not claim the tax relief available. Andrew Prosser, head of investments at InvestEngine, warns that failing to claim eligible tax relief could “reduce pension pots by hundreds of thousands of pounds.” Between 2016 and 2021, £1.3bn of pension tax relief went unclaimed. For instance, a worker saving £400 monthly into a personal pension over 40 years could lose £350,000 by not claiming tax relief. Savers can claim tax relief through self-assessment and make backdated claims for up to four years.

Farmers rally against inheritance tax changes

Rachel Reeves and Sir Keir Starmer face mounting pressure over proposed inheritance tax changes, set to take effect in April 2026. Tom Bradshaw, President of the National Farmers Union, warned that the Government may need to reconsider the policy as its human impact becomes evident. He said: “I don’t believe Sir Keir Starmer or Rachel Reeves can live with the policy as it is today.” Farmers protested in London, highlighting the financial strain the tax could impose on their livelihoods. Treasury Minister James Murray acknowledged farmers’ concerns but insisted on the necessity of the changes for public finances.

Farage vows to abolish inheritance tax

Nigel Farage, leader of Reform UK, has pledged to abolish inheritance tax, describing it as “double taxation” that unfairly burdens families during their most difficult times. Speaking at a protest in London against Labour’s tax policies, he said: “It’s a really nasty tax and it hits people at the most unpleasant part of their lives. They’ve just lost their parents and suddenly the taxman is after them.”

Tax changes hit holiday home owners

The UK Government plans to abolish the furnished holiday lettings regime from April 2025, impacting second home owners significantly. The changes will mean that properties will no longer benefit from special tax treatments, with capital gains tax reliefs ceasing for disposals after the cut-off date. Additionally, interest relief will be limited to a flat rate of 20%. The Association of Taxation Technicians points out that the abolition will not directly affect council tax or business rates for holiday lets, as these are governed by separate eligibility tests.

Record complaints flood FOS

The Financial Ombudsman Service (FOS) has reported a record number of complaints regarding motor finance loans, surpassing credit card complaints for the first time. In the last quarter, 18,658 new car loan cases were reported, a significant increase of 33% from the previous quarter and more than tripling year-on-year. ” The surge comes ahead of a crucial court case where car loan providers will challenge a ruling from the Court of Appeal regarding commission charges. The Financial Conduct Authority (FCA) has suspended motor finance complaints until December 4, 2025, to assess the implications of ongoing legal proceedings. Despite the rise in motor finance complaints, the overall number of complaints to the FOS decreased by 7% to 68,430.

M&A deals plummet amid uncertainty

The number of mergers and acquisitions (M&A) involving UK companies significantly decreased at the end of 2024, with only 65 deals recorded in December, down from 151 in November. This decline is attributed to uncertainty surrounding US trade policy and increased taxes announced by the Government. The quarterly M&A total fell to 402, representing a 13% drop from the previous quarter and a 9% decrease compared to the same period in 2023. However, the value of domestic M&A transactions rose by over a quarter to £8.6bn, driven by major deals such as Nationwide’s acquisition of Virgin Money for £2.9bn and Barratt’s purchase of Redrow for £2.5bn. In contrast, the value of foreign acquisitions of UK companies plummeted to £4.5bn.

Firms ‘stuck in neutral’ over AI – Hardman

According to Darren Hardman, Microsoft’s UK CEO, many organisations are “stuck in neutral” regarding their AI strategies. A survey involving around 1,500 UK leaders and 1,440 employees revealed that over half of executives believe their organisations lack a formal AI plan. This stagnation is concerning, especially as the Tony Blair Institute estimates that AI could displace up to 3m jobs in the UK. Microsoft is advocating for the deployment of AI in workplaces through autonomous AI agents that perform tasks without human intervention.

UK’s super-wealthy numbers stagnate

According to the Wealth Report by Knight Frank, the number of individuals in the UK with assets exceeding $10m remained stagnant at 55,667 in 2024, reflecting a mere 0.9% increase from the previous year. This contrasts sharply with global trends, where the number of super-wealthy individuals rose by 4.4%. The UK ranks seventh globally, holding 2.4% of the world’s wealthy population. The report suggests that the UK Government’s tax policies, particularly the end of non-dom status, may be driving wealthy residents abroad, with a net loss of 10,800 millionaires last year. Meanwhile, London’s prime property market has seen a decline, ranking 83rd in performance despite being in the top 5% by value.