Business confidence among leaders has plummeted to its lowest level since the Brexit vote, according to the Institute of Directors (IoD). The optimism index fell to -72 in July from -53 the previous month, marking a nine-year low. A survey of 894 finance directors highlighted tax and employment costs as major concerns, predicting rising wages and declining revenues. Anna Leach, chief economist at the IoD, commented: “Companies continue to battle cost increases… many firms report that they are struggling to plan amid a cacophony of risk.”

UK small business confidence has reached its lowest level in five years, according to Novuna Business Finance. Only 26% of small businesses expect growth in the next three months, a level of sentiment last seen during the COVID-19 lockdowns. Jo Morris, Head of Insight at Novuna, stated that businesses are overwhelmed by rapid changes since the election, including market volatility and tax rule shifts. The report highlights a fourth consecutive quarterly drop in growth forecasts, with London and the North East experiencing significant declines.

High street sales have declined for the seventh consecutive month, with physical store sales rising only 0.8% compared to July 2024. BDO attributes this downturn to rising living costs. Sophie Michael, head of retail and wholesale at BDO, said: “Consumers are under huge pressure. Food inflation remains stubbornly high.” The British Retail Consortium forecasts food inflation will increase from 4% to 6% by year-end, due to ongoing economic challenges for physical retailers facing higher business rates and employment costs.

The former Labour shadow chancellor Anneliese Dodds has called on the Government to consider imposing a wealth tax on Britain’s richest individuals. Dodds has become the most senior Labour figure to call for a wealth tax, despite Jonathan Reynolds, the Business Secretary, describing the policy as “daft” last week. Dodds believes the Treasury should be considering the evidence put forward by the Commission on Wealth Tax, as well as other ideas that have been put forward. Ms Dodds, the MP for Oxford East, quit as the development minister in February over Sir Keir’s cuts to the overseas aid budget.

Inheritance tax (IHT) revenue reached a record £6.7bn for the 2022/23 tax year, marking a £700m increase from the previous year. The rise is attributed to a freeze on the tax-free threshold at £325,000 since 2021, which has led to 13% more households becoming liable. Claire Trott, head of advice at St James’s Place, noted that upcoming changes could increase the number of estates paying IHT by 10,500. The Government’s removal of the Agricultural Property Relief and Business Property Relief is expected to generate an additional £500m annually. Pete Fairchild, head of private clients at Crowe, said the changes had prompted a swift response from clients, many of whom have taken their 25% tax-free lump sum from their pension and gifted that immediately to their children.

Thousands of people are petitioning the UK Government for statutory paid menstrual leave for those with endometriosis and adenomyosis. The petition demands up to three days of paid leave monthly for individuals with confirmed diagnoses. Currently, about 1.5m people in the UK are affected by these conditions, which can cause severe pain and fatigue. The petition has garnered over 3,450 signatures, and if it reaches 10,000, the Government will respond.

A report by Enginuity reveals that 80% of SMEs faced recruitment challenges in the past six months. Only 15% find the UK labour market attractive, with skills shortages identified as a major issue. Poppy Bramford, Enginuity’s policy manager, said: “This report is a striking confirmation of how severely the skills system is failing the majority of engineering and manufacturing SMEs.” However, despite these challenges, many SMEs remain optimistic about future growth and training investments.

The UK pension sector is grappling with a significant recruitment challenge, as 80% of pension scheme administrators struggle to find skilled personnel. The industry, valued at £3.2trn and contributing over 2% to UK GDP, lacks the appeal of other financial services despite offering lucrative salaries. Angela Staral, COO of People’s Partnership, highlighted the need for better pension education to attract Gen Z talent. Staral said: “This is not just a financial service, it’s a purpose-driven, future-facing profession where every action directly impacts people’s long-term financial wellbeing. It’s a space where purpose meets progression, combining finance, technology and social impact.”

Tax reporting is becoming increasingly complex as organisations face new challenges amid digitalisation. The OECD’s Tax Administration 3.0 aims to simplify processes, but national governments’ varied approaches create confusion, says Pavlo Boyko in Accounting Today. The Global Business Complexity Index by TMF Group highlights these issues, noting that digitalisation can lead to operational risks and increased compliance costs. Timings for e-invoicing implementation vary, with around 60 countries adopting it. As one expert stated: “What we are experiencing is the transition from traditional bureaucracy to electronic bureaucracy.”

Older savers are increasingly gifting money to their children and grandchildren to mitigate the impact of upcoming inheritance tax (IHT) changes. A survey by Paragon Bank found that 17% of savers over 65 have started gifting due to these changes, with 71% giving to children and 46% to grandchildren.