Britain is losing its appeal to wealthy families, according to the ‘Millionaires on the Move’ report by Henley & Partners. Tax reforms, including the abolition of the non-domiciled tax status and changes to inheritance tax, have prompted many to reconsider their residency. Stuart Wakeling, managing partner at Henley & Partners UK, noted that competition from countries like Portugal and the UAE is intensifying. Meanwhile, the Isle of Man is experiencing a surge in interest from wealthy UK buyers seeking to avoid high taxes. Property experts report that these buyers are drawn to the island due to its significantly lower income tax rates, which are less than half of those in the UK.

The UK’s global competitiveness has declined since Brexit, according to the latest World Competitiveness Ranking (WCR) by IMD Business School. The UK now ranks 24th, down from the top 20 before Brexit. Professor Arturo Bris said Brexit had led to reduced market exposure and foreign investment. The report highlights a current account deficit of -3.13% of GDP and low inward investment flows, ranking 66th.

Two in three small business owners have increased prices three times or more in the last five years, with a quarter planning another rise before summer ends. Research by Smart Energy GB shows that rising supplier costs and energy bills are the main reasons for these increases. On average, small businesses have seen their outgoings rise by nearly 17% over the past year.

UK private sector regular wage growth, excluding bonuses, slowed to 2.9% in the three months to April, down from 3.1% in the three months to March. Meanwhile, overall regular pay growth across the entire economy remained steady at 3.4% – stronger than the 3.2% expected, according to the Office for National Statistics. Meanwhile, UK job vacancies declined by 19,000 to 707,000 in the three months to May while unemployment fell 0.1% to 4.9%. Businesses remain cautious due to rising employment costs with many freezing hiring and some 90% planning redundancies this year.

The Bank of England has held interest rates at 3.75% after a deal between the US and Iran pushed oil prices down and reduced inflationary risks to the UK economy. The Monetary Policy Committee voted seven to two to leave rates unchanged, with chief economist Huw Pill and external member Megan Greene dissenting. They called for a quarter-point increase to offset the risk of still-elevated energy prices feeding into prices.

Labour’s first year in power saw a £29.6bn increase in tax revenue, reaching £863.6bn for 2024-25. The rise was largely due to a £23.2bn increase in income tax, attributed to frozen thresholds. Stamp duty surged by 23.6%, generating an additional £3bn, while VAT rose by £13bn due to increased spending. Tory party chairman Kevin Hollinrake said: “Labour hiked taxes on hardworking families after perpetually promising they wouldn’t…And while families pay more, Labour are pouring billions more into welfare for people who don’t work.” Elsewhere, Darwin Friend, research director at the TaxPayers’ Alliance, accused Labour of “milking hard-pressed taxpayers dry” through stealth taxes.

HMRC is notifying individuals about new tax regulations under Making Tax Digital (MTD), which began in April. This initiative requires self-employed individuals and property income earners to submit quarterly reports instead of one annual return. MTD-compatible software is necessary for compliance and HMRC is hosting webinars to assist businesses and landlords in preparing for these changes.

Landlords in England and Wales will no longer be allowed to hold tenants’ deposits in their own bank accounts, as Labour implements reforms to the rental sector. Housing Minister Matthew Pennycook announced that landlords must use custodial schemes, which involve third-party deposit managers. This aims to address the “inherent power imbalance” in the current system. Pennycook said: “The proposed removal of the insured schemes is based on the objective of ensuring that tenant deposits are as safe as possible.”

Andy Burnham has won the Makerfield by-election with 24,937 votes, increasing Labour’s majority to more than 9,000 and securing over half of all votes cast. Reform UK finished second on 15,696 votes, while Restore Britain came third with 3,111. Burnham said the result showed voters had backed “change”, calling it a “final chance” for Labour to respond to concerns raised during the campaign.