No skills boost from foreign worker tax

A tax meant to fund new skills for British workers, while reducing the incentive for companies to hire staff from abroad and reduce migration, has been described as a “disaster” after analysis found that none of the proceeds have been allocated directly to training domestic workers. In 2017, the Government introduced a tax on businesses which charged them for every foreign worker they hired. However, the Government has confirmed that the more than £2bn raised by the levy has not been ringfenced and has gone into a central government funding pot. Labour MP Jake Richards said the immigration skills charge “was an admirable attempt to link immigration and skills policy” but described implementation of the policy as a disaster. He added: “The Government should reassess the charge – not to raise further revenue and place further burdens on business, but to ensure an explicit link between hiring immigrant workers and investment in skills and employment.”

HMRC to target WFH tax relief

HMRC has issued a warning to remote workers claiming tax relief, saying that those who work from home by choice may face significant repayment bills. Over a quarter of adults still work from home, but relief is only available for those required to do so due to their job. Andy Wood, of Tax Natives, cautioned that the criteria for claiming this relief changed following the pandemic, saying: “Many people who were eligible during the pandemic may no longer qualify today, so it’s important not to assume continued entitlement without checking.” Mr Wood also warned taxpayers to be aware that even if they use an agent or tax refund company to submit a claim, they remain personally responsible for the accuracy of the information provided.

Haigh: Labour must ‘rip up’ its tax rules

Former cabinet minister Louise Haigh says Labour must “rip up” the self-imposed tax rules which prevent the Government from raising income tax, VAT or National Insurance, arguing that this would allow ministers to deliver a “serious programme of investment and reindustrialisation.” Warning that Labour faces an “existential” threat from Reform UK, Ms Haigh has urged Prime Minister Sir Keir Starmer to “take the fight” to Nigel Farage’s party, adding: “I believe the only way to achieve that is through an economic reset, through ripping up our self-imposed tax rules.”

Ministers mull import tax rethink

Shoppers in the UK may soon face increased prices on imported goods as the Government considers abolishing the £135 Low Value Imports threshold. Currently, items under this limit are exempt from customs duty, but experts warn that scrapping this could see costs climb significantly. The potential overhaul aims to support British retailers struggling against cheap imports, but it could lead to higher prices for consumers. Trade bodies are advocating for a reduction of the threshold to £40, which would increase the number of items subject to duty. Concerns have also arisen regarding the divergence of UK customs rules from those of the EU, potentially complicating post-Brexit trade.

Shell faces £380m tax hit

Shell is set to incur an additional £380m in tax due to the expansion of the energy profits levy, which raises the tax rate for North Sea producers from 75% to 78%. The oil giant anticipates this will cost approximately $509m (£382m) by 2030. While the Treasury estimates that it will pull in an extra £2.3bn in revenue from 2025 to 2030, critics argue that the increased levy could accelerate the decline of North Sea production.

HSBC warns over growth risks

HSBC has warned that global trade uncertainty poses “serious potential risks” to growth, with the economic outlook uncertain due to a series of “unknowns.” Mark Tucker, the bank’s chairman, said there was an “uncertain geopolitical and macroeconomic environment globally,” adding: “The overarching impact of the changing approach to global trade relations has been to increase economic uncertainty with serious potential risks to global growth.” He says the range of possible shifts in policy “make any attempt at medium-term projections very difficult.”

Bank boss flags trade uncertainty

NatWest chief executive Paul Thwaite has warned of a “pause in activity” among some of Britain’s biggest firms, saying corporate confidence has been hit by the possible impact of US tariffs. Mr Thwaite said: “There is no doubt that global economic uncertainty has increased and there has been a dip in confidence across both businesses and households.”

FCA to tighten crypto investment regulations

The Financial Conduct Authority (FCA) is set to tighten regulations on cryptocurrency investments, with the City watchdog announcing plans to restrict the use of credit cards for crypto purchases. It will also limit access to crypto lending products. The FCA said: “We are considering a range of restrictions, including restricting the use of credit cards to directly buy cryptoassets, and using a credit line provided by an e-money firm to do so.” Consumers, it is noted, will still be free to use borrowed money to buy stablecoins issued by FCA-regulated companies. The regulator is also considering restrictions on the lending and borrowing of cryptoassets.

BOE: ‘More to do’ on climate change risks

The Bank of England has reiterated a call for firms to focus on risks related to climate change. Noting that the Bank was one of the first central banks “to create supervisory expectations for how the firms we regulate manage climate-related risks,” David Bailey, executive director for authorisations, regulatory technology and international supervision, said: “There is still more to do, and it remains critical that firms continue to focus on these risks.” He added that the Bank is set to update its supervisory expectations to incorporate lessons that it has learnt since it issued a supervisory statement on the matter in 2019. Highlighting that the proposed expectations will align with international standards for insurers and banks, he said this will include “robust risk management frameworks.”

Regulation key to fintech future

The Treasury is set to unveil its inaugural Financial Services Growth and Competitiveness Strategy in July, with Chancellor Rachel Reeves having vowed to make the UK “one of the best places in the world for fintechs to start-up, scale-up and to list.” The Government has pledged to cut red tape, with sector leaders warning that regulation has hindered fintech’s ability to deliver economic growth. Richard Davies, chief executive of Allica Bank, says the industry needs “regulation that promotes competition and growth.” While Ms Reeves has hailed the UK as a leading market for fintech investment that is second only to the US, analysis by KPMG shows that investment has fallen since 2021 and hit a four-year low of £7.9bn in 2024.

Female-led firms face funding gaps

A new report reveals that female entrepreneurs, particularly mid-life women, still face major obstacles in securing funding, with this discrimination costing the UK economy up to £250bn. With many female business leaders forced to rely on personal savings or remortgage homes due to lack of support from banks and investors, just 19% of start-ups are led by women. The report, commissioned by HSBC and Noon, found that 69% of mid-life female entrepreneurs used personal funds, while only a small fraction received support from angel investors (4%), banks (3%), or venture capital (2%).

Crypto firms face banking barriers

A survey of UK businesses conducted by start-up and cryptoasset industry groups shows that half of the companies had been denied business bank accounts or had accounts closed, with the most common reason given being a connection to crypto or blockchain. It is noted that one firm was rejected despite being registered with the Financial Conduct Authority (FCA). The FCA plans to restrict retail investors from borrowing to trade in crypto as it looks to address concerns about consumer protection. It is noted that Chancellor Rachel Reeves recently proposed draft regulations exempting overseas stablecoin issuers from UK authorisation.

EU reset could hurt US deal

EU leaders are set to visit the UK this month for a summit that has raised concerns among Brexiteers about the potential impact on a trade deal with the United States. Senior figures, including former International Trade Secretary Sir Liam Fox, have warned that Prime Minister Sir Keir Starmer’s approach could lead to the UK being “tied into a relationship with the EU” that limits its ability to negotiate freely with other countries. David Campbell Bannerman, a former MEP who chairs the Conservative Democratic Organisation, said he is “deeply worried” about a possible “EU reset,” saying it “basically would tie our hands in all our trade deals” and represent “a huge step backwards for the UK’s independent trade policy.”

Hacks a ‘wake-up call’ for businesses

With cyber-attacks making the headlines after Marks & Spencer, the Co-op and Harrods were targeted by hackers, Patrick Tooher in the Mail on Sunday says business leaders “are living in fear they could be next.” However, he notes that while 40% of company boards had a director with specific responsibility for cyber security in 2021, this has fallen to just over a quarter. Data from insurance broker Howden shows that such attacks have cost UK companies £44bn in lost revenue over the past five years and have affected 52% of firms. The National Cyber Security Centre estimates that 76% of UK businesses experienced a cyber security incident in the past year. Susannah Streeter of investment platform Hargreaves Lansdown says the recent cases serve as “a wake-up call for organisations to ensure their IT systems have fortress-like security,” noting that hacking incidents can cause both financial and reputational damage.

Experts expect BoE rate cut

Economists expect the Bank of England to cut interest rates by 0.25 percentage points to 4.25% this week, with Sandra Horsfield, an economist for Investec, saying it is a “near-certainty” that borrowing costs will be reduced. The Bank’s Monetary Policy Committee (MPC) is likely to reduce rates on the back of falling inflation, with Consumer Prices Index inflation slowing to 2.6% in March, from 2.8% in February, and services inflation falling from 5% to 4.7%. In the background of any decision is uncertainty over the impact of US tariffs, with Edward Allenby, UK economist for Oxford Economics, saying that “beyond May’s interest rate decision, the more important question is how US tariff announcements are influencing the MPC’s thinking.”

Bank of Mum and Dad support hits £38.5bn

Since 2021, the Bank of Mum and Dad has provided £38.5bn in assistance to help children enter the property market, a 71% increase compared to the previous four years. In 2024 alone, parents contributed £9.6bn, up from £9.37bn in 2023. Last year, 173,500 first-time buyers received an average of £55,572 from their parents, representing 52% of all first-time buyers. Experts say that as mortgage rates begin to fall, the level of support from parents may decrease, as lenders are expected to relax affordability rules, allowing buyers to borrow more. However, the disparity in support needs remains significant, particularly in London, where the average deposit is 138% of income.