The top 1% of UK taxpayers contributed approximately £93.8bn in income and capital gains tax (CGT) for the 2023/24 tax year, accounting for 33% of total tax revenue, according to HMRC. The top 100,000 taxpayers alone paid £54.9bn. Alex Davies, founder of Wealth Club, said: “A very small group of individuals is responsible for a disproportionately large share of the nation’s tax revenue. Rather than penalising success, we should be creating a stable and attractive environment where entrepreneurs and wealth generators choose to remain, invest and contribute to the nation’s long-term success.” The recent abolition of the non-domicile scheme has prompted concerns about wealthy individuals leaving the UK for more favourable tax regimes abroad.

The UK ranks 32nd out of 38 in the Tax Foundation’s International Tax Competitiveness Index, with issues around complexity, the high burden on business and substantial property taxes weighing on the country’s performance. The Adam Smith Institute’s analysis places the UK at 37th for property tax competitiveness, just above Italy. The UK has the highest property tax as a share of capital stock in the OECD at 2.6%. Commenting on the study, Shadow Chancellor Mel Stride said: “We need a tax system that maximises growth and productivity.” He called stamp duty a “terrible tax” that hinders the housing market and economic competitiveness.

Rachel Reeves, the Chancellor, plans to eliminate £6bn of unnecessary government red tape annually. The initiative aims to boost UK economic growth and will be detailed in a package of measures announced today. The Government will allow AI companies to launch products without adhering to existing regulations. Reeves said: “This is about showing that when we say growth is our No 1 priority, we mean it.” The Treasury expects the changes to save businesses £1.5bn yearly, increasing to £6bn by the decade’s end.

Innovate Finance has released a report criticising the Prudential Regulation Authority (PRA) for imposing excessive regulations on challenger banks. The report claims the rules create an uneven playing field, hindering competition and innovation. Janine Hirt, CEO of Innovate Finance, said: “It is vital that the regulatory framework supports – rather than hampers – [challenger’s] success.” The report warns that the implementation of Basel 3.1 reforms could reduce lending to SMEs by up to £44bn, labelling this a “growth tax” on the economy.

A new report from the Resolution Foundation has predicted that the number of young people not in employment, education or training (NEETs) is expected to break the 1m mark, with inactivity due to disability and ill health having helped drive the number of young NEETs up by 200,000 to 940,000 over the last two years. The think tank has urged Chancellor Rachel Reeves to scrap plans announced in the Budget to remove the lower National Minimum Wage rate for under-21s, to avoid young people being “priced out of entry into the labour market”. Senior economist Louise Murphy said the Government “should redouble efforts to reduce the number of NEETs by making it easier for young people to return to education if they drop out, or to get their first experience of work”.

Small business owners are struggling due to a backlog of fraud cases at His Majesty’s Revenue and Customs (HMRC). Chas Brooke, who runs an alpaca farm in Devon, claims he has lost up to £5,000 because he could not file his VAT return since July. HMRC cited a six-month resolution time due to staff shortages and high volumes of fraudulent claims. Brooke described the situation as “completely bonkers,” receiving threatening letters for unpaid returns. Nimesh Shah, CEO of Blick Rothenberg, stressed the need for a dedicated team to address such fraud cases swiftly.

Amazon Web Services (AWS) suffered from a series of serious errors and connectivity issues on Monday, affecting more than 2,000 companies worldwide. The scale of the disruption led many experts to warn of the danger of relying on a small number of companies for cloud services. Cori Crider, the executive director of the Future of Technology Institute, said: “The UK can’t keep leaving its critical infrastructure at the mercy of US tech giants. With Amazon Web Services down, we’ve seen the lights go out across the modern economy – from banking to communications.” AWS leads Microsoft and Google in cloud computing services and is expected to generate over $126bn in revenue this fiscal year.

UK inflation is projected to reach 4% in September, double the Bank of England’s target of 2%. A Bloomberg poll indicates core CPI inflation may rise to 3.7%. The IMF and OECD have highlighted the UK’s inflation struggles, predicting it will exceed the G20 average. JP Morgan economist Allan Monks noted that high transport and petrol prices will likely drive services inflation up. Goldman Sachs warned of increased energy inflation in the last quarter, which could complicate Chancellor Rachel Reeves’ efforts to manage the cost of living.

New research from the Centre for Economics and Business Research (Cebr) predicts that by the 2040s, the UK will be poorer than Turkey and Latvia. The UK is projected to drop to the 46th richest country globally by 2050, down from 30th last year. Lithuania, Czechia, and Saudi Arabia are expected to surpass the UK in GDP per capita by 2030. Cebr’s report, included in the book Prosperity Through Growth, offers 24 policy proposals to improve the UK’s economic standing.