Analysis by the Taxpayers’ Alliance shows that modest earners are paying high tax rates originally designed for the wealthy. While the 40% higher-rate threshold – which kicks in at £50,270 – was 83% higher than average earnings in 2010, a worker now only has to earn 37.6% more than the average wage to be taxed at the higher rate. This is expected to fall further – to 28.3% – by 2027/28. The additional rate threshold was 6.2 times average earnings in 2010, but this has now fallen to 3.4. The threshold for this band was cut from £150,000 to £125,140 in 2023. Darwin Friend, head of research at the TaxPayers’ Alliance, said: “Our tax system has gone from being progressive to punishing, with even relatively modest earners now paying eye-watering tax rates.” The Chancellor has refused to rule out further freezes in the Spring Statement and analysis shows that extending the freeze by a single year would add £4,100 to the tax bill of a worker earning £75,500. Doing so would also raise £15bn for the Treasury.

A number of taxpayers with large pension pots are choosing to pay an extra £20,000 in income tax to avoid an inheritance tax raid. This comes after the Government announced reforms that will mean unspent pension wealth will be included when calculating IHT from April 2027. Nick Nesbitt of Forvis Mazars has observed a “significant increase” in clients drawing down pension assets and incurring higher income tax bills as a result. He said: “The strategy previously was to limit withdrawals to £50,000 a year so you are only paying a marginal rate of 20%. But people are now raising the yearly income to £100,000 and taking the 40% tax hit.” Jason Hollands, of wealth manager Evelyn Partners, said that while some clients had intended not to touch their pensions for as long as possible, changes announced in October’s Budget have made them reconsider.

Donald Trump’s proposed reduction of the corporation tax rate for US-based companies has raised concerns over an exodus from the London Stock Exchange. Duncan Edwards, chief executive of BritishAmerican Business, warned that the move could lead to a significant shift of UK-listed companies to the US, saying: “There is a real risk that you get some UK champions relocating their listings.” Mr Trump has vowed to cut America’s corporation tax rate from 21% to 15% for companies that make their products in the US, which would be far lower than the 25% rate in Britain.

The Treasury faces a £2.6bn shortfall as smokers turn to illegally imported tobacco to evade tax hikes. The Office for Budget Responsibility had initially projected tobacco duties would generate £11.4bn, but only £8.8bn was collected, marking a 12% decline from the previous year.

Analysis for the Trades Union Congress (TUC) suggests that work-related illness is costing the UK economy more than £400m a week, with it shown that work-related ill-health cost the economy £22bn in 2023. The report, which looked at data from the Health and Safety Executive (HSE), also shows that the number of cumulative sick days lost due to ill-health has risen by a third since 2010, hitting 34m. TUC general secretary Paul Nowak believes that the Government’s Employment Rights Bill could be key to addressing this, saying: “Cracking down on exploitative practices like zero-hours contracts and giving people more security will boost workers’ health, well-being and productivity. It will also help more people stay in work.”

The Conservatives are calling for salary thresholds for all work visas to be raised to £38,700. While the minimum that applicants for work visas have to earn increased from £26,200 to £38,700 in April 2024, the threshold does not apply to some jobs, such as those in health and social care. Warning that too many people arriving on work visas end up in minimum wage jobs, shadow Home Secretary Chris Philp told BBC Radio 4’s Today programme that this is “bad for the taxpayer.” He cited Office for Budget Responsibility analysis which “shows that people coming here on lower wages actually cost the general taxpayer money because they consume more in services than they pay in tax.”

Internal emails show there was concern over the reliability of Office for National Statistics (ONS) reports on employment data after the sample size “collapsed to only five individuals.” The email shows that, in October 2023, deputy chief economist Richard Heys highlighted that the reduction in sample size had caused a 30% shift in the data point for one industry. He also suggested that maintaining the ONS’ labour force survey had “little and falling merit.” The survey faltered during the pandemic, with the ONS unable to conduct in-person interviews, and by 2023 the response rate had fallen to below 15%.

Total revenue across UK consulting firms is expected to rise by 5% to £15.7bn in 2025, according to Source Global Research. While this would not match the post-pandemic growth that saw the industry grow by 13% in 2021 and 15% in 2022, it would mark a rebound from the 3.4% contraction recorded in 2024. The report says almost every industry is set to increase its use of consultants this year, with Nick Jotischky, head of market trends at Source, noting the impact of technology, suggesting that businesses will seek help with how to use AI. While use of consultants is expected to increase in most industries, demand is expected to fall is the public sector as the Government looks to reduce departments’ use of consultancies.

An American Express poll shows that 94% of SME leaders believe that supporting their peers is critical to driving business success, while 54% have secured new business opportunities through their professional networks. The survey of 500 SME owners and senior decision-makers shows that product or service recommendations were the most valued forms of peer support, followed by business or financial advice. While a separate report from Deloitte found that that peer learning can improve the quality of decision-making by 20% and cut business risk by 30%, research from Be The Business found that a third of firms receiving peer advice reported revenue increases.

The High Street is experiencing significant challenges, with closures and job losses on the rise as sales decline and businesses struggle with escalating costs following the Autumn Budget. The British Retail Consortium has indicated that retailers will have “little choice” but to reduce investment due to increased National Insurance contributions, business rates, and wage expenses. Analysis suggests that retailers face £7bn in new costs.

Consumer confidence in the UK has rebounded, with the confidence index rising from 111.1 to 112.5 in February, marking a return to levels last seen in December. William Ullstein, UK chief executive of YouGov, noted that respondents expressed optimism regarding the value of their residential properties. However, he cautioned that this positivity was “somewhat offset” by concerns over expected declines in household finances.

The Competition and Markets Authority (CMA) will focus on interventions in digital markets which have a “clear and direct” impact on UK consumers and businesses. Following a directive from the Government to enhance economic growth, the CMA has introduced a new strategic framework, emphasising “pace, predictability, proportionality and process” in its oversight of Big Tech. CMA chief executive Sarah Cardell says the regulator will provide a “roadmap” for future interventions, provide clarity on which issues are likely to be prioritised for earlier action, which will be deprioritised, and which will remain subject to consideration. The competition watchdog has this year gained new powers to investigate firms with a turnover of at least £1bn in the UK or £25bn globally.

Richard Wilson, chief executive of Interactive Investor, has warned that the tax regime is hurting UK markets, warning that increasing numbers of investors are trading in foreign markets instead. Voicing concern that tax policy means UK markets are “just about tradable,” he said the introduction of transaction tax in the late 1980s and early 1990s has “gradually eroded the UK market.” Mr Wilson added: “If you tax your market out of existence, you get less tax because it doesn’t actually work.”

Rachel Reeves is expected to cut spending in her upcoming Spring Statement, with economists at BNP Paribas forecasting that Office for Budget Responsibility data will show that the Government’s fiscal headroom has been depleted. Meanwhile, Quilter’s latest Trend Survey saw almost half of the fund groups polled say spending cuts were the best option as the Chancellor looks to balance the books. Around a third (35%) of respondents, meanwhile, expect Ms Reeves to opt for a mixture of tax hikes and spending cuts. Just 6% predict that taxes will rise but cuts will be avoided.

Six in ten of UK households do not feel financially comfortable despite average wealth having risen by 12% in the last year, according to survey from wealth manager St James’s Place. While the mean household has seen its assets – savings, investments and possessions – rise from £113,154 to £126,483 over the last year, 58% say their finances are in a worse state than they were a year ago. Of these, 70% say inflation has had the biggest impact. The poll also found that younger people are more likely to have a financial plan in place, with more than half over those under 35 planning ahead compared to just 28% of those over 55.