HMRC has spent £186m to recover only £44m from its loan charge initiative, according to recent figures. Approximately 50,000 workers engaged in disguised remuneration schemes, believing they were sanctioned by HMRC. But the tax office sought to claw back unpaid tax, leaving thousands of contractors with large retrospective tax bills. Sir Jacob Rees-Mogg, a former Tory cabinet minister, said: “Retrospective action is completely unconstitutional […] Innocent taxpayers killed themselves because of a disgraceful and unfair administration of tax, when they thought they’d done something perfectly legitimate. HMRC should have gone after the promoters of the schemes if they thought they were wrong.” Steve Packham, co-founder of the Loan Charge Action Group, added: “In opposition, Rachel Reeves said HMRC should go after the perpetrators, yet in government has done a complete U-turn.”

A new report from the Organisation for Economic Co-operation (OECD) reveals that taxes on wages in the UK have increased more than in any other member country. The tax wedge, which measures total taxes on labour minus cash benefits, rose by 2.45 percentage points to 32.4%. This compares to an average rise of 1.15% across the OECD. The increase is attributed to higher national insurance contributions and the freezing of income bands. Despite the rise, the UK’s tax wedge remains below the OECD average of 35.1%. The report comes after the International Monetary Fund last week forecast that taxes as a share of the economy in the UK were set to climb at the fastest rate in the G7 between 2024 and 2031. Commenting on the figures, Sir Mel Stride, the shadow chancellor, said: “Rachel Reeves said she wouldn’t tax working people, but she’s delivering the fastest rise in the tax burden of any major economy.”

The ongoing conflict in the Middle East may lead to 150,000 job losses in the UK and cost households an average of £730, according to Oxford Economics. Michael Saunders, a senior advisor at the firm and former Bank of England rate-setter, said: “Even if the war ended very soon, the outlook for the economy is pretty grim.” The report also predicts inflation could rise to 4.5%, surpassing previous forecasts. The Resolution Foundation estimates that the energy shock from the conflict will cost UK households a total of £11bn this year.

New data from the Ipsos Economic Optimism Index reveals that British optimism in the economy has fallen to its lowest level since records began. Some 78% of respondents expect the economy to worsen over the next year, resulting in a net optimism score of -72. Gideon Skinner, Ipsos’ senior director of UK politics, noted that public dissatisfaction has been entrenched for some time. He said: “Labour needs to convince the public that they can deliver a more optimistic outlook for the economy.”

The UK is falling behind the US and Europe in attracting ultra-high-net-worth individuals, according to the annual Wealth Report by Knight Frank. The number of such individuals in the UK rose by only 12.1% to 27,876, while the US saw a significant increase of 66,916 to 251,352. The report attributes the UK’s sluggish growth to the abolition of non-dom tax status by Chancellor Rachel Reeves, which has cooled demand for luxury property. Liam Bailey, global head of research at Knight Frank, stated: “We are witnessing one of the most significant shifts in global wealth distribution in modern history.”

Plans for the state-backed National Employment Savings Trust (Nest) to invest 30% of its members’ cash in private markets has caused alarm among experts. The £30bn investment target is far higher than comparable pension schemes, which allocate closer to 20% of their funds to private markets. Following numerous warnings about the private credit market, Lord Hollick, who sits on the House of Lords financial services regulation committee, said funds needed to look very closely at their risk appetite. Simon French, the chief UK economist at Panmure Liberum, pointed to worries over liquidity and overvalued private assets while Baroness Altmann, the former pensions minister, described Nest’s target as “racy” considering we could be at the top of the cycle.

Business leaders are voicing concern over Sir Keir Starmer’s proposal to abolish the Regulatory Policy Committee (RPC). They warn the move could lead to “significant errors” in policymaking and erode public trust. The Royal Statistical Society says sidelining the independent body, which was highly critical of Labour’s Employment Rights Act, would put the economy at risk. Meanwhile, almost a dozen former RPC members have written to the Telegraph to warn that scrapping the body would weaken the UK’s reputation as a place to do business. The Department for Business and Trade plans to replace the RPC with a panel of experts, but critics says this could lead to “hasty or biased analysis” that could see potentially damaging policies given Royal Assent before they are properly scrutinised.

Inflation in the UK rose to 3.3% in March, driven primarily by soaring fuel prices due to the conflict in the Middle East. The Office for National Statistics reported that petrol prices increased by 8.6p per litre, reaching 140.2p per litre. Thomas Pugh, chief economist at RSM UK, commented: “The jump in inflation was almost entirely driven by rocketing fuel prices.” The Bank of England’s monetary policy committee is expected to hold interest rates steady or even increase them considering the threat of higher prices. Adam Deasy, an economist at PwC, said: “This is just the first wave of the energy shock, primarily showing up in higher prices at the pump. We are yet to see the knock-on impact of price pressures in downstream or byproducts to oil and gas, such as fertiliser, helium, plastics or metals.”

Coutts has launched a wealth advisory service targeting the video games sector, aiming to tap rising entrepreneurial wealth as private banks expand beyond traditional client bases into emerging industries.