Small businesses in the UK are increasingly feeling the strain from cyber-security threats and economic instability, prompting many to consider restructuring. According to a survey by Kroll, less than one-third of British firms feel adequately prepared for potential challenges, with 27% of smaller companies feeling less equipped than a year ago. The survey revealed that 45% of businesses identified cyber threats as their primary concern, followed by 40% citing global economic instability. Sarah Rayment, managing director at Kroll, said: “Considering the domestic and international challenges… we anticipate a rise in distress among smaller to mid-market businesses.” Some 26% of firms are expected to undergo restructuring in the coming year, driven by profitability concerns, competitive pressures and the challenging economic environment.

London’s tourism sector is bracing for a challenging summer as high-spending American visitors are reportedly booking fewer trips. Business leaders are urging the Government to abolish the controversial tourist tax, which prevents foreign visitors from reclaiming 20% VAT on purchases. Recent data from VisitBritain indicates that forward flight bookings from the US are down 7% compared to 2024, with similar declines from other countries. According to the business group New West End Company, the absence of tax-free shopping has already cost the West End £640m in unrealised sales, as tourists opt for destinations where they can shop without VAT.

According to a recent study, property taxes are the most detrimental to economic growth, reducing future GDP growth per capita by over 1%. The research, which surveyed 10 Western developed countries, found that value-added taxes (VAT) also negatively impact growth, with a 1% increase leading to a 0.3% decrease in GDP per capita. Interestingly, some taxes, such as corporate income tax and specific goods taxes, can actually enhance GDP growth. The study suggests that policymakers should consider the benefits of these taxes while being mindful of the adverse effects of VAT and personal income tax.

HMRC has announced that sole traders and landlords earning over £50,000 must adopt Making Tax Digital (MTD) for Income Tax by April 6, 2026. Approximately 780,000 self-employed individuals will be affected initially, with an additional 970,000 joining in 2027. James Murray MP, Exchequer Secretary to the Treasury, said: “MTD for Income Tax is an essential part of our plan to transform the UK’s tax system into one that supports economic growth.”

The Governor of the Bank of England has expressed concerns over a “growth shock” affecting the UK economy due to Donald Trump’s trade policies. Andrew Bailey said that while he was hoping the UK could strike a trade deal with the US, as it is an open economy it would still be hit by a slowdown in global growth. Speaking to CNBC television, Bailey added that the Bank’s policymakers will have to weigh the risks to growth against an expectation of rapidly rising inflation. “We’ve got to balance those two. But I think the trade issue is the new part of that story,” he said.

Revolut has announced a pre-tax profit of £1.1bn for 2024, more than double the £329m reported in 2023. This growth is attributed to a quadrupling of revenues in its wealth division, driven by increased cryptocurrency trading and the launch of its own crypto exchange. Europe’s most valuable start-up also saw a 74% rise in subscription revenue, reaching £423m, as more customers opted for paid plans. Nik Storonsky, Revolut’s chief executive, described 2024 as a “landmark year,” stating: “We’re making strong progress towards 100m daily active customers across 100 countries.” With 52.5m customers globally and a valuation of £33.8bn, Revolut is set to launch its UK bank in 2025, having secured a banking licence last year.

CEOs in the UK have seen their pay packages grow at a faster rate this year than their American rivals, with median pay rising 11% to $6.5m, compared with a 7.5% increase for US peers.

KPMG has launched its annual competition to identify and support the UK’s most innovative scale-ups, marking its 12th year. The initiative serves as a launchpad for diverse startups, including healthtech and AI innovators. Previous finalists like Babylon Health and What3Words have successfully secured international investment. The competition is particularly timely, as venture capital investment in the UK has significantly declined, with a 35% global drop in 2024 and UK figures falling to 15-20%. Despite these challenges, the UK remains Europe’s leading tech hub, with startups securing $7.7bn in VC funding in the first half of 2024, according to KPMG’s Venture Pulse report.