As AIM marks its 30th anniversary, the market’s head, Marcus Stuttard, is advocating for tax clarity from the Treasury. Following a leaked memo, concerns arose over proposed tax changes, including the potential scrapping of the inheritance tax exemption for AIM shares, which could generate between £100m and £1bn annually. Stuttard remarked: “I just don’t think the sums add up,” pointing to the significant positive impact of business relief on the market. With Chancellor Rachel Reeves potentially needing to raise £20bn in taxes, the total removal of business relief could further jeopardise investor sentiment, especially as AIM faces a decline in listings. Research from Grant Thornton highlighted that AIM companies contribute £35.7bn to UK GDP and support 410,000 jobs.

The Bank of England has decided to maintain interest rates at 4.25% to combat persistent inflationary pressures, particularly in light of rising energy prices due to tensions in the Middle East. Governor Andrew Bailey stated: “Interest rates remain on a gradual downward path, although we’ve left them on hold today.” Despite three members of the Monetary Policy Committee (MPC) advocating for a 25 basis point cut, the majority opted for caution, citing the unpredictable global landscape. Inflation data from the Office for National Statistics indicated a 3.4% rise in prices over the past year, prompting the Bank to remain vigilant. The MPC acknowledged that monetary policy must stay restrictive until inflation risks are adequately addressed, with forecasts suggesting inflation could reach 3.7% by September.

HMRC’s “Making Tax Digital” initiative is set to impose significant costs on nearly 900,000 self-employed individuals, with estimates suggesting an additional burden of at least £480 per worker. Starting from April 2026, self-employed workers will be required to report their taxes quarterly instead of annually, necessitating the purchase of third-party software, which can cost around £150. Fiona Fernie, a partner at Blick Rothenberg, described the initiative as “pointless,” stating that it adds unnecessary bureaucracy without increasing tax revenue. The Institute of Chartered Accountants in England and Wales (ICAEW) echoed these concerns, labelling the project as “burdensome and not justifiable.” Despite the backlash, the Government plans to extend the digital tax rules to more self-employed individuals by 2028, potentially bringing in an additional 900,000 taxpayers.

The UK’s tax gap has increased significantly, with HM Revenue & Customs (HMRC) reporting a loss of £46.8bn in tax liabilities for the 2023-24 financial year, equating to 5.3% of total theoretical tax liabilities. The gap, which represents the difference between taxes owed and collected, was £39.8bn or 4.8% in the year prior. Small businesses now account for 60% of this gap, a rise from 48% in 2019-20. HMRC noted that the tax gap attributed to criminals has decreased from 12% to 9% over the same period. Additionally, individuals and wealthy individuals contribute to 10% of the overall gap, with uncollected corporation tax making up the largest portion at 41%.

Young professionals, known as Henrys (High Earners, Not Rich Yet), are increasingly frustrated with the high tax burden in the UK. Despite earning over £100,000, many feel financially strained due to rising costs and taxes. Estimates suggest there are around 800,000 Henrys in England and Wales, with a significant portion of income tax revenue coming from the top 10% of earners. Alex Mengden from the Tax Foundation noted: “I think the reliance on high earners… there’s been a bit of a continuous process over the past 10 or 15 years.” As the Government prepares for the autumn Budget, there are concerns that further tax increases may be on the horizon, potentially alienating this demographic from supporting Labour in future elections.

Nick Ephgrave, the chief of the Serious Fraud Office (SFO), is set to enhance efforts against white-collar crime by recruiting whistleblowers and undercover agents. Ephgrave aims to leverage his experience from the Metropolitan Police to tackle complex corporate crime more effectively. “Fraudsters are just criminals acting in a different sphere,” he said. “They’re cheating ordinary people, taking money, and damaging the country – the same as gunrunners, drug smugglers and all the rest. We should therefore use as much of the tactical armoury that we can against them. That was something I brought in from my policing background, and we are continuing to build that capability.”

Shirine Khoury-Haq, the Chief Executive of the Co-op, has written to Ed Miliband, urging him to address the significant challenges hindering small and medium-sized enterprises (SMEs) in achieving net zero. She highlighted that a lack of affordable finance and excessive planning regulations are obstructing their efforts. Khoury-Haq stated: “I continue to believe that energy consuming businesses – both small and large – could and should be encouraged and equipped to play in this urgent transition.” She called for free energy auditing and low-cost loans for English firms, aligning them with Scottish initiatives.

The UK experienced a significant decline in its millionaire population, losing approximately 437,553 individuals in 2024, according to the annual UBS Wealth Report. The total number of dollar millionaires fell from 3.06m in 2023 to 2.62m in 2024, making the UK one of the few major economies to witness such a drop. Factors contributing to this decline include high interest rates and a struggling stock market. Michel Frey, head of UK high net worth at UBS, stated: “Average real-term wealth per adult in the United Kingdom fell in 2024 because living-cost pressures and rising interest rates moved faster than either house prices or most financial markets.” Meanwhile, the US saw a contrasting trend, with household wealth increasing by 11% in 2024. The country gained more than 1,000 millionaires a day over the year.