Private equity investment in UK businesses has significantly declined, reaching levels not seen since the early pandemic. In the first half of 2025, private equity funds executed 726 investments, a 17.1% decrease from 876 deals in the same period of 2024, according to KPMG. Alex Hartley, head of corporate finance at KPMG UK, remarked: “As we headed into 2025 off the back of strong deal numbers last year, the expectation was that M&A activity would continue to pick up.” However, geopolitical uncertainties and the impact of tariffs have created volatility in the deals market. The first quarter saw 370 investments, which fell to 356 in the second quarter, with the southwest of England being the only region to experience growth. However, interest in UK accountancy firms from private equity houses has reached unprecedented levels, with a Kingsley Napley survey revealing that 46% of firms are open to investment and a third have already secured funding. Notably, 86% of top 60 firms reported approaches from private equity or external investors for 2024.

The Financial Reporting Council’s (FRC) decision to enhance the audit practices for small and medium-sized enterprises (SMEs) in the UK has been backed by the Institute of Chartered Accountants in England and Wales (ICAEW). ICAEW chief policy and communications officer Iain Wright said: “SMEs are crucial to the UK economy and local communities, and can be at the vanguard of addressing and solving the UK’s productivity and growth challenges. We strongly support FRC’s initiative to help SMEs access audit services and, in turn, help them secure the capital they need to innovate, scale and grow.”

According to HMRC’s latest annual accounts, the number of penalties cancelled on appeal has surged 29% year on year to 46,266. HMRC put the increase down to a new penalty regime for VAT which made it easier for firms to appeal fines through their online accounts. But Price Bailey’s Andrew Park says poor customer service, administrative failings by HMRC and banking delays were also factors that led to late filings. Many fines were also likely cancelled because the individual owed no tax. Mr Park said many taxpayers might be unaware they could appeal a fine. “When two-thirds of appealed penalties are overturned, yet only a small fraction of the nine million issued are challenged, it suggests a significant number of taxpayers may be paying penalties they could successfully contest.” A spokesman for HMRC said: “Our penalty reforms enable customers to appeal easily and quickly online against both penalties and penalty points. Our new points-based system means only those who persistently miss deadlines will incur a financial penalty.”

Hargreaves Lansdown has cautioned Rachel Reeves against “tinkering” with pension tax relief, warning it could undermine efforts to encourage retirement savings. Helen Morrissey, head of retirement at Hargreaves Lansdown, said: “As we run into the Budget any discussion around reform of pension tax relief needs to be treated with care.” The warning comes after Pensions Minister Torsten Bell refused to rule out a tax raid on pensioners. The new Pensions Commission, set to report in 2027, aims to address the issue of inadequate retirement savings, while also considering the impact of potential tax rises in the Autumn Budget. The Fabian Society has suggested a flat rate of tax relief for all tax bands to simplify the system while James Carter from Fidelity International urged the Government to provide clarity on pension taxation to foster effective saving strategies.

Edmund Shing, Chief Investment Officer at BNP Paribas Wealth Management, has expressed serious concerns regarding the proposed wealth tax in the UK, labelling it a “dangerous road to go down.” He argues that such a tax could deter entrepreneurs and negatively impact long-term economic growth, saying: “Wealth taxes…are disincentives to all of that.” The discussion comes amid fears of a potential exodus of high net worth individuals following the abolition of the non-dom status, which could lead to significant financial losses for the UK. A report by the Centre for Economics and Business Research (CEBR) suggests that if a quarter of wealthy foreigners leave, it could create a £4bn gap in public finances and result in over 3,000 job losses.

Rachel Reeves could amend fiscal rules to alleviate challenges during spring fiscal events, according to the Institute for Fiscal Studies (IFS). The IFS suggests that instead of altering the frequency of forecasts by the Office for Budget Responsibility (OBR), the Chancellor should adjust the rules to allow a budget deficit of 0.5% of GDP at each spring forecast. The current fiscal rules, which limit borrowing, are under scrutiny as Reeves contends with a potential £30bn budget shortfall due to high borrowing costs and policy reversals.

Top business executives in the UK are set to receive briefings from the Foreign Office on global risks, including conflicts and trade tensions, as part of the newly established Geopolitical Impact Unit. The initiative aims to provide firms with “straight from the source” insights to help them expand overseas while reducing reliance on costly private consultants. However, some executives question the necessity of such initiatives, citing existing specialist advisers and concerns over potential tax increases.

The Financial Conduct Authority (FCA) is currently consulting on stablecoins, but critics argue that the UK is lagging behind other nations. Countries like Japan, Singapore, and the US have already implemented regulations, while the UK is still in the consultation phase. Paul Marshall, chair of Marshall Wace, says that “smart regulation costs nothing” and is essential for attracting investment. He points out that the UK is trapped in bureaucracy, which overestimates risks and underestimates opportunities. With the US passing the Genius Act, the UK faces a critical choice between adopting a dynamic stablecoin model or a more bureaucratic approach. The Mail reports on how tokenisation will lead to a trading revolution, making the industry cheaper, more transparent and more accessible for everyday investors.