HMRC has faced criticism from the Public Accounts Committee (PAC) for its inability to track tax contributions made by billionaires in the UK. A report from the committee highlighted “significant opportunities to collect more revenue,” warning that the lack of clarity could undermine public confidence. Despite improvements in revenue collection from wealthy individuals, the PAC expressed disappointment that HMRC could not effectively utilise available data to identify billionaires. The report said HMRC’s estimate that it failed to collect £300m from offshore accounts last year was too low, given that UK residents held £849bn in tax havens in 2019. HMRC defines wealthy individuals as those with incomes of £200,000 or more, or assets equal to or above £2m. The PAC said because a billionaire has wealth and assets 500 times greater than this level, the potential impact of the tax revenues generated is huge. MP Lloyd Hatton, a member of the PAC, suggests that closing the tax gap would offer an alternative to wealth taxes, saying: “Rather than the Treasury trying to drum up new taxes, if we just got this right and closed the tax gaps there would be more money to spend on public services.”

Roads Minister Lilian Greenwood says the Government will not increase personal taxes for those on “average incomes.” This comes after Transport Secretary Heidi Alexander told Sky News that those on “modest” incomes would not be targeted by any increase in taxes. In an interview with the same channel, Ms Greenwood was asked to clarify what was considered a modest income. She said the comment referred to “people who work for a living. People who get a payslip.” She also suggested that “those who’ve got the broadest shoulders should bear the greatest burden,” adding to speculation that the Chancellor may be considering a wealth tax to help boost Treasury coffers. On Labour’s stance on taxation, Ms Greenwood insisted: “Our promise when we came in was that we wouldn’t hit working people with increases in employee National Insurance, in income tax or VAT, and we’ve absolutely stuck to those promises.”

Richard Hughes, chair of the Office for Budget Responsibility, has warned that increasing taxes could hurt economic growth. Appearing before MPs on the Treasury Select Committee, Mr Hughes voiced concern over the UK’s climbing tax burden, saying that it could hit Government spending. He argued that there were “reasons to worry” about Britain’s high level of debt and cautioned the Chancellor that there was only limited scope to raise taxes without hindering economic growth.

Research from Vistra shows that just 28% of UK company directors feel ready for impending changes at Companies House. Reforms coming into effect through the Economic Crime and Corporate Transparency Act will see a tougher enforcement approach, including the potential for unlimited fines and director disqualification. Among SMEs, none said they were “very prepared” for the changes, while the rate at the biggest firms only came in at 37%. Quizzed on the new ‘failure to prevent fraud’ offence, only 19% of directors said they are currently compliant and just 38% feel confident that their fraud prevention measures would qualify as a statutory defence. While 21% of respondents said they are compliant with a requirement demanding identity verification for directors, persons of significant control, and company filers, Companies House data shows that only 2.86% have actually completed the process.

Chancellor Rachel Reeves has set out a plan to “rewire” the UK’s financial services system, saying that deregulation outlined in her Leeds Reforms will make the UK the number one destination for financial services businesses by 2035. The Chancellor confirmed that the ring-fencing regime, which separates a lenders’ retail and investment activities, will be reformed. The plans will see City Minister Emma Reynolds lead a review into how changes “can strike the right balance between growth and stability, including protecting consumer deposits.” The reforms also include reform of the Financial Services Ombudsman that will see it “returned to its original purpose as a simple, impartial dispute resolution service.” Speaking at the annual Mansion House event in the City of London, Ms Reeves said: “In too many areas, regulation still acts as a boot on the neck of businesses … Choking off the enterprise and innovation that is the lifeblood of growth.” The Chancellor also noted that the Government is consulting with the Financial Conduct Authority “to introduce a brand-new type of targeted support for consumers.”

The Bank of England has set out a series of reforms designed to ease the regulatory burden on smaller and mid-sized banks, including adjustments to capital requirements and a one-year delay to key parts of the Basel 3.1 reforms. The Bank also announced that the Prudential Regulation Authority (PRA) will issue a discussion paper to outline how to reduce the barriers for mid-sized banks to compete in the mortgage market. The Bank said it plans to deliver a “strong and simple framework” that offers a streamlined regulatory regime for banks and building societies. Sam Woods, chief executive of the PRA, said the changes will “bring in a simpler regime for smaller banks, make it easier for mid-sized banks to scale up in the mortgage market, and allow an extra year for part of the implementation of new investment banking rules.”

The Financial Conduct Authority has announced changes that it says will lower costs for companies looking to boost finances for growth and widen access to investment opportunities for consumers. The City watchdog says firms that are already listed will not need to publish lengthy prospectuses to issue more shares. The FCA will also halve the length of time between a prospectus being issued and an IPO and enable companies to issue corporate bonds to retail investors more easily. Simon Walls, executive director of markets at the FCA, said: “These bold shifts promote innovation, lower costs, and enable a broader investor base for growing businesses.”

Under plans designed to boost economic growth, the Treasury will look to encourage savers with cash in low-interest accounts to invest their money in stocks and shares instead. Officials said there would be a “review of risk warnings on investment products to make sure they help people to accurately judge risk levels.” The plan will see an advertising campaign to encourage more people into retail investing, with Barclays, Lloyds, HSBC, NatWest, AJ Bell, Schroders, St James’s Place and Interactive Investor all backing the drive. Michael Summersgill, CEO of AJ Bell, said: “Kickstarting an investing revolution could boost household finances and UK capital markets in the process.” He went on to suggest: “Removing friction between cash and investment accounts would create a more flexible system, lifting the psychological barrier between saving and the stock market.”

UK retailers experienced an increase in sales during June, with this driven by warmer weather and significant sporting events like Wimbledon. According to the British Retail Consortium (BRC), total retail sales rose by 3.1% year-on-year, with this up from the 0.2% increase recorded a year ago. Food sales surged by 4.1%, influenced by a food inflation rate of 3.7%. Helen Dickinson, chief executive of the BRC, said: “Retail sales heated up in June, with both food and non-food performing well.”

Bank of England policymaker Catherine Mann says inflation pressures remain a challenge and has stressed the importance of using interest rates to bring down price growth. Ms Mann, an external member of the Bank’s Monetary Policy Committee, said: “It’s important for us to continue to use monetary policy in order to get us to that 2% inflation objective because inflation is a tax on everybody.”

London’s super-prime property market is facing significant challenges due to an oversupply of homes and declining demand. According to Stuart Bailey, head of London super-prime sales at Knight Frank, the market is at “the bottom of a 10-year low ebb in super-prime sales.” The number of new sales instructions has surged by 19% year on year, with properties over £5m seeing a 43% increase. Despite this, transactions remain low, with homes selling for 10% to 20% less than their initial listing prices. Factors such as the Government’s decision to abolish the non-dom regime have further dampened interest from overseas investors. However, there are signs of potential recovery, as domestic buyers are beginning to seize opportunities in the market.