Chancellor Rachel Reeves is considering reforms aimed at preventing US-linked workers in the UK from being taxed twice on the same income. The Government has launched a consultation on the tax treatment of workers employed through US limited liability companies (LLCs). Under current rules, some UK-based employees can face both US and UK taxation on profit distributions, pushing effective tax rates above 75%. The Treasury said the reforms are intended to attract “talented, globally mobile individuals” and the plans form part of a wider Government push to attract highly skilled migrants, including visa fee refunds for scale-up firms. Arun Advani, director of the Centre for the Analysis of Taxation, said that addressing a “mismatch in how the UK and US treat LLCs” would “remove unintentionally high rates that prevent some wealthy people from coming here.” Critics argue that the plans do little to address broader concerns about the UK’s competitiveness following the abolition of the non-dom regime and the extension of inheritance tax to foreign nationals.

Upcoming changes to state pension taxation have raised concerns about potential inequalities. As state pension payments increase annually, more recipients may exceed the frozen personal allowance of £12,570, triggering a 20% income tax. Kate Smith, head of public affairs at Aegon UK, highlighted the risk of unequal treatment, saying: “It would be unfair if those who have saved are treated differently to those who haven’t saved in a pension.” The Government is working on legislation to ensure that those solely reliant on the full new state pension will not pay income tax.

The SNP has warned that National Insurance hikes are leading to the closure of charity shops across the UK. A UK Government spokesperson insisted: “We support charities with one of the world’s most generous tax regimes for the sector, providing £6bn in relief last year alone, including exemptions from paying business rates.”

József Váradi, Wizz Air’s chief executive, has warned that rising taxes could force the airline to reduce its UK routes. He said the levies on the sector could render Wizz Air’s operations in the UK uncompetitive.

Data shows that changes to Statutory Sick Pay (SSP) will benefit around 15m workers in the UK. As of April, employees now receive SSP from the first day of sickness, eliminating the previous three-day waiting period. The minimum earnings limit has also been removed, allowing those earning less than £123.25 per week to receive guaranteed sick pay at 80% of their average weekly salary. HMRC said the changes “make SSP more accessible and remove barriers for lower-paid employees.”

The UK gender pay gap is narrowing, but a PwC report indicates it could take over 30 years to eliminate completely. The mean pay gap decreased from 11.2% to 10.7% and the median from 8.6% to 8.1% in the past year. However, Katy Bennett, workforce reporting director at PwC UK, said: “Incremental improvements alone will not be enough to close the gap within a generation.”

Analysis by UHY Hacker Young shows that 222 companies have been forced off London’s junior stock market, AIM, over the past two decades after losing their nominated adviser (nomad) – firms approved to act as the primary regulator for small-cap firms. The number of nomad firms has fallen from 68 in 2009 and 30 in 2020 to just 23 today. The London Stock Exchange introduced reforms to the nomad regime on June 4, clarifying that advisers are not responsible for ensuring AIM companies’ websites comply with disclosure requirements. The changes are designed to reduce regulatory burdens, encourage more firms to become nomads and help attract more IPOs to AIM. It is noted that the sector has been hit by tax changes introduced by Chancellor Rachel Reeves, who reduced inheritance tax relief on AIM shares in her first Budget, increasing the effective tax rate to 20%.

The UK economy is expected to show a contraction in April, with fuel prices driven up by the conflict in the Middle East. Analysts predict that Office for National Statistics data will show a 0.1% decline in output, following growth of 0.3% in March. Deutsche Bank chief UK economist Sanjay Raja said: “After a super strong start to the year, we expect the UK to see some course correction in the second quarter,” adding: “The cost of living and the cost of doing business will have likely increased, weighing on activity and investment.” Analysts at Pantheon Macroeconomics are more pessimistic, forecasting that April will see a 0.2% decline in GDP, while Investec Economics expects the economy to remain flat.

The European Central Bank has raised interest rates to 2.25%, warning that a “major energy shock” stemming from the Middle East conflict is starting to have an impact on the wider economy.