With an increase in employer National Insurance contributions and the upcoming Employment Rights Bill adding to firms’ cost pressures, more businesses are opting to go off-payroll and utilise contractors. Dave Chaplin, CEO of tax compliance firm IR35 Shield, said: “Accessing on-demand talent for one-off projects and controlling costs and keeping headcount down are the main reasons that firms hire contractors.” With costs climbing, Rebecca Seeley Harris of Re:Legal Consulting commented: “It is no surprise that businesses are looking to engage off-payroll.” However, Kate Underwood, managing director at Kate Underwood HR and Training, urged firms to be aware of off-payroll working rules designed to identify ‘disguised’ employees, saying that while contractors “can be a great way to grow your business … if they look like a duck and quack like a duck, the tax office might say they are a duck.”

Official data shows that compulsory liquidations were up 11% in the year to July. Of the 2,081 company insolvencies recorded in July, 339 companies were forced to close down. This was 26% higher than the monthly average seen across 2024. R3 president Tom Russell said HMRC “is taking a more assertive stance towards enforcement, with greater appetite to recover unpaid taxes through the courts,” adding that company directors “are feeling the impact of this firmer enforcement, which is adding pressure on businesses already navigating a challenging market.” Data from the Insolvency Service also revealed a slight year-on-year increase in the number of administrations. Nick O’Reilly, restructuring director at MHA, said low business confidence has added to pressure on businesses on the brink of collapse, while Simon Edel, UK turnaround and restructuring strategy partner at EY-Parthenon, warned that “liquidity pressures are intensifying for more UK companies.” Freddy Khalaschi, business recovery partner at Menzies, said: “The summer heat is bearing down on British businesses.”

The North East of England has emerged as the UK’s leader in business start-ups, with 10,400 new companies launched in the first half of the year. This marks a 19% increase from the previous six months. According to a report by NatWest and Beauhurst, ten regions experienced a rise in start-ups, indicating a resurgence in entrepreneurial confidence. The software sector saw the most significant growth, while hospitality followed closely, with 26,800 new establishments opening across the UK, an 8.5% increase from last year.

Industry leaders have warned the hospitality sector is under increasing pressure, with 79% of pubs, restaurants, and bars raising prices due to increased operating costs. A survey by trade bodies including UKHospitality, the British Institute of Innkeeping and the British Beer & Pub Association shows that 73% of operators have less than six months of cash reserves, while more than half of the firms polled have reduced staff to manage finances. The sector has seen costs climb amid increases in the national minimum wage and National Insurance contributions, while reduced business rates discounts have added to the challenging climate. The trade bodies have urged the Government to implement tax relief measures to support struggling businesses.

Analysis by savings platform Moneybox shows that a lack of confidence in retail investing could be costing those unwilling to enter the stock market an average of £37,000 compared to investors. Moneybox’s financial confidence index shows that 84% of those polled feel more comfortable relying on cash savings to build wealth, up from 79% in 2024. It was also shown that just 11% have chosen to transfer their money from savings to active investments. The poll also found that two-fifths of respondents would feel more comfortable if they knew the basics of investing, while over a quarter said they would feel reassured if they received guidance from a trusted source, such as a financial adviser.

Shares in the FTSE 100’s Big Five banks – HSBC, NatWest, Barclays, Lloyds and Standard Chartered – have created £78.9bn of market value this year. HSBC has led the way, gaining over £28bn in market value after its stock jumped nearly 21% in the year so far. The banking sector is the second-best performing FTSE 100 sector this year, with a return of 37%. Meanwhile, the FTSE 350 banks index has risen by more than 30%. Russ Mould, investment director at AJ Bell, said: “Investors seem happy with banks as rather dull utilities, which churn out consistent profits and generous cash payouts,” adding that “dividend payments and buybacks still make for a heady combination for income-seekers.”

A poll for Arton Capital suggests that many wealthy UK residents might leave the country if a wealth tax is introduced. The survey found that 60% of British millionaires believe they could have a better life abroad. Armand Arton, CEO of Arton Capital, said: “The uncertainty around the Government’s proposed wealth tax mirrors the ongoing economic uncertainty seen around the world.” The survey polled 1,009 UK residents with a net worth of at least £1m.

Revised data from the Office for National Statistics (ONS) shows that the UK economy was 2.2% bigger at the end of 2023 than at its pre-pandemic peak, with this up from a previous estimate of 1.9%. The revision came as the ONS updated the way it calculates GDP and its measurement of the activity of large multinational companies. The ONS also included new figures on tax data for R&D. Craig McLaren, head of national accounts at the ONS, said: “Overall, there is little impact on growth from all these improvements, with average annual growth over the period 1998 to 2023 remaining at 1.8% and average quarterly growth remaining at 0.5%.”

The Office for National Statistic (ONS)  has delayed the publication of its latest monthly retail sales figures over concerns about the quality of the data. The official statistics body says the delay will allow for “further quality assurance.” The ONS has faced criticism in recent months, with concerns over the reliability for some of its data, particularly figures on the jobs market. Robert Wood, chief UK economist at Pantheon Macroeconomics, said all ONS data “must be suspect now,” adding that while the ONS had “done the right thing” in rescheduling release of the sales data rather than “sweeping the problem under the carpet,” the “mistakes are piling up.”

Office and hybrid workspace company IWG has reported a “dramatic” increase in demand for flexible workspaces in small towns. Chief executive Mark Dixon highlighted that flexible working has become the “default model for a significant proportion of white-collar workers,” emphasising a shift away from traditional office settings.