Business news 16 June 2025
Retail, staff numbers, dividend tax, directors flee UK, MTD, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Retail footfall dips and sales slow
Retail footfall fell by 1.7% year-on-year in May, according to new figures from the British Retail Consortium (BRC), with this following a 7.2% increase in April. Footfall in shopping centres and on the high street fell by 2.5%, while retail parks saw a 0.2% decline. While UK retail sales increased by 1% in May, this was the weakest monthly growth so far in 2025. Helen Dickinson, chief executive of the BRC, suggested that May’s slowdown stemmed from higher bills in April, which “depressed consumer sentiment and the appetite to visit retail stores.”
Staff numbers slip since tax burden climbs
HMRC data shows that there was a 109,000 fall in payrolled staff in May. Outside of the early months of the pandemic lockdowns, this marks the steepest monthly decline since the tax office started collecting the data ten years ago. Analysis shows that the number of people on official payrolls has fallen by 276,000 since higher taxes on employers were announced in October. Firms have had to contend with a rise in National Insurance contributions, a lower threshold at which the tax is paid, and a 6.7% rise in the minimum wage for over-21s. It is also noted that vacancies have fallen more sharply than in America, Germany and France, according to data from recruitment agency Indeed, while the number of people looking for work is at the highest level since December 2020.
Tax plans target dividends
Chancellor Rachel Reeves is exploring significant tax increases, including a potential raid on dividends, as part of a strategy to generate tens of billions of pounds in revenue. Officials are considering abolishing the £500 tax-free allowance for dividends or raising the tax rate from 39%. This move could yield over £300m for the Treasury. However, the Conservatives argue this would unfairly burden taxpayers and businesses. Other tax changes supposedly drawn up by Treasury officials include a possible increase in the levy on bank profits from 3% to between 5% and 8%. Meanwhile, Treasury Chief Secretary Darren Jones has refused to rule out further tax increases this autumn, telling GB News that any hikes in the Budget “will be subject to the OBR forecasts.” Arguing that “it’s right that we take these types of decision in an orderly way,” he added: ” You’re going to have to wait.”
UK firms look overseas to dodge tax raid
UK companies are increasingly hiring work-from-home (WFH) employees from overseas to mitigate the impact of a £20bn tax raid on employers and stringent worker rights. As UK unemployment rises to its highest level in over three years, firms are turning to overseas talent, particularly in customer service roles. This trend may affect London’s service sector, which accounts for 81% of the UK’s economy, as firms seek to reduce costs amid rising employment taxes.
UK firms brace for US tax hike
Major UK companies are urgently engaging with the Treasury regarding potential tax increases on their US operations. A proposed new law could nearly double the tax rate on UK firms’ US profits to 41%. Tim Sarson, head of tax policy for KPMG UK, warned that this could inflict more damage on the UK than previous tariffs imposed by the US. The Treasury is actively listening to these concerns and updating companies on trade negotiations with the US. Analysts at JPMorgan warn that the impact of Section 899 is more significant for US subsidiaries of foreign companies than for US firms themselves.
Directors flee UK amid tax fears
An analysis of company filings reveals a significant rise in business leaders departing the UK, driven by concerns over changes to the non-domiciled tax regime. Over the past year, more than 4,400 directors have left, with a 75% increase in departures noted in April compared to the previous year. The recent abolition of the non-dom tax regime, which previously allowed wealthy foreigners to shelter their assets for a fee, has led to fears of a talent exodus. A survey by Oxford Economics indicated that 60% of tax advisers expect over 40% of their non-dom clients to leave within two years.
London faces fintech exodus
London is facing a potential loss of fintech champions as companies look to switch their main listings. This shift could result in the City missing out on tens of billions in fintech initial public offerings. Richard Hunter at Interactive Investor notes that there are “any number of companies in the frame to leave London, especially in the tech sector,” adding: “One thing that can be said with some certainty is that until something changes – tax breaks for companies listing, abolition of stamp duty, lighter regulation and so on – there will be more.” While figures from Dealroom show the US leads the way for fintech investment, raising $18.6bn in 2023, compared with $3.2bn in the UK, KMPG analysis shows that British fintechs are attracting more start-up funding than those in France, Germany, China, India, Brazil and Canada combined.
Retailers flag tax hike fears
Rachel Reeves has been warned that additional tax increases could lead retailers to raise prices, reduce jobs, and halt new store openings. The British Retail Consortium (BRC) estimates that firms face a £5bn increase in costs following the Chancellor’s October Budget, which included a rise in employer National Insurance contributions and the national minimum wage. Andy Higginson, chairman of JD Sports and the BRC, said retailers are already looking to cut their workforce due to these rises, with chains including Morrisons, Tesco, and Sainsbury’s already making staff reductions. Mr Higginson has described the increases set out in the Budget as a “tax on jobs,” warning that they ultimately affect consumers through increased prices.
Experts question MTD
Blick Rothenberg has raised concerns over HMRC’s Making Tax Digital (MTD) initiative, saying it imposes a higher reporting burden on businesses and the self-employed without generating additional revenue. Fiona Fernie, a partner at the firm, questioned the purpose of MTD, saying: “This will not change their actual tax liabilities or the payment dates on which income tax has to be paid.” Starting April 2026, businesses with a gross income of £50,000 or more will be required to report quarterly, extending to those earning £30,000 in 2027 and £20,000 in 2028. A report by the Public Accounts Committee indicated that MTD could cost self-assessment taxpayers £200m more than they save, which Ms Fernie described as “completely intolerable.” She emphasised that the obligation to file additional returns without adequate support feels unfair, contradicting the taxpayers’ charter.
Watchdogs’ growth mandate ‘pointless’ without reform, peers warn
A House of Lords report has warned that an “entrenched culture of risk aversion” within the City’s key regulations has hindered efforts to meet a Government mandate that urges them to help drive economic growth. The Financial and Services Regulation Committee has called on Financial Conduct Authority and Prudential Regulation Authority officials to “drive cultural change throughout their organisations,” saying that the watchdogs “do not have a clear understanding of the cumulative burden of regulation.” This, the report argues, “prevents them from recognising and addressing the negative impact that their activities have on the growth and international competitiveness of the sector.” Committee chair Lord Forsyth said regulators “need to address barriers and do more to remove, or mitigate at the very least, anything that makes the UK a less attractive place to do business.”
Pub company to cut jobs
Stonegate Group, Britain’s biggest pub company, is set to cut up to 150 across its head office and central functions. The firm, which runs more than 4,000 pubs across the UK, has been working with restructuring specialists at AlixPartners as it looks to reduce debts. Stonegate, which is owned by private equity firm TDR Capital, has a debt pile of almost £3bn and reported pre-tax losses of £257m in 2023 and £214m in 2024. It has come under increased pressure in recent months after the Chancellor raised employers’ National Insurance contributions and lowered the threshold at which they are paid. Stonegate has been reviewing rents and agreements with suppliers as part of restructuring efforts.
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Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
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Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!
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