Business news 19 May 2025
PM urged to be bolder on EU talks. Inflation, pensions, billionaires, house prices, HMRC, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Please note: on the 19/3/25 CPA moved after 45 years on King Street, to new offices a couple of miles down the road at Profile West, 950 Great West Road, Brentford, TW8 9ES.
PM urged to be bolder on EU talks
MPs have warned that the Government’s “secretive” approach to negotiations with the EU may have harmed efforts to “reset” relations with the bloc. In a letter to Keir Starmer, the Commons Foreign Affairs Committee told the Prime Minister that public support for closer relations with Europe means the Government has room to be “bold in its offer to the EU.” However, the cross-party group of MPs said attempts to reset relations with the EU are being hindered by a “perceived absence of a strategic vision,” warning that a “piecemeal and secretive” approach to negotiations “not only complicates public and parliamentary scrutiny of the reset, but could also negatively affect the impact, stability and durability of its outcome.” Committee chair Dame Emily Thornberry has urged ministers to “act with a little less caution and a lot more confidence,” insisting that “there is every reason to believe the EU will respond positively.”
Fresh EU trade deal could raise £25bn in tax – Lib Dems
The Liberal Democrats say that a deeper trade deal with the EU could generate £25bn in tax revenue, potentially reversing benefit cuts. Research from the Best for Britain campaign group indicates that such a deal could boost GDP by 2.2%. Calling for a deal that would not see the UK joining the customs union or single market, Lib Dem foreign affairs spokesperson Calum Miller said: “A far more ambitious trade deal with Europe… would be the single biggest thing ministers could do to boost growth and fix the public finances.” The party is urging Labour MPs to collaborate on the initiative. This comes with Prime Minister Keir Starmer preparing for a significant summit with Ursula von der Leyen, European Commission president. Meanwhile, Chancellor Rachel Reeves has expressed optimism over securing closer ties with Europe, saying “there is a lot of room for improvement” for ways to trade with the bloc.
Starmer urged to reset Brexit ties
Prime Minister Keir Starmer is under pressure to adopt a more ambitious approach to Brexit negotiations, with Dame Emily Thornberry, chair of the Commons Foreign Affairs Committee, calling for a “courageous” reset of relations with Europe. Dame Emily noted that Brexit is projected to cost the UK 4% of its GDP annually, warning that “the country is suffering as a result of having put trade barriers between Europe and Britain.” She also advocates for reducing red tape in service exports and removing students from migration statistics, arguing that “migration is about people who come and live in the UK permanently.” Dame Emily has also emphasised the need for a more relaxed regulatory approach to facilitate trade with the EU. Mr Starmer’s upcoming summit with EU leaders, including European Commission president Ursula von der Leyen, aims to address contentious issues such as tuition fees for EU students and fishing rights.
Inflation set to soar above 3%
Inflation is anticipated to exceed 3% when the Office for National Statistics releases its latest consumer prices index figure this week, with the data covering the year up to April. Economists predict a significant increase from March’s 2.6%, driven by soaring energy bills and recent tax hikes. Sanjay Raja, chief UK economist at Deutsche Bank Research, said: “Historically large increases in energy and water bills will lead the rise in inflation momentum.” Experts also believe that the rise in employers’ National Insurance contributions may contribute to higher prices.
UK sees fall in billionaires
The number of UK billionaires has fallen, according to the latest Sunday Times Rich List. The annual ranking of the UK’s 350 richest people has seen the biggest decline in billionaires in the 37 years that the paper has been compiling the list. The number of billionaires slid to 156 this year from 165 in 2024. Overall, the combined wealth of those on the list stood at £772.8bn – with this down 3% from a year ago. Topping the list for the fourth consecutive year is the Hinduja family, owners of the Hinduja Group conglomerate, who are worth more than £35bn. Robert Watts, compiler of the Rich List, said analysis suggests that fewer of the world’s super rich are coming to live in the UK. He said wealthy individuals he had interviewed have criticised the Chancellor, noting: “We expected the abolition of non-dom status would anger affluent people from overseas.”
Tycoons in tax warning
Chancellor Rachel Reeves has been warned that tax hikes could drive wealth creators out of the country, with plans to raise capital gains and inheritance taxes set to add to an exodus triggered by the scrapping of non-dom status. Tony Langley, founder of a £1.7bn industrial group, has voiced concern over plans for a 20% inheritance tax on stakes in family companies worth more than £1m, saying the Chancellor “is going to destroy a huge swathe of family businesses,” and noting that the sector is one of the UK’s largest generators of tax revenue. Sir James Dyson, meanwhile, described the policy as a “tax grab.” Concerns over an exodus of wealth creators comes as the Sunday Times Rich List shows a record drop in the number of British billionaires. There are 156 billionaires in this year’s list, with this nine fewer than last year. The combined wealth of those on the list has fallen by 3% to £772.8bn.
Markets
Over in the US on Friday the S&P 500 rose 0.7% to 5958.38 and the NASDAQ rose 0.52% to 19211.10. This morning on currencies, the pound is currently worth $1.339 and €1.188. On Commodities, Oil (Brent) is at $64.95 & Gold is at $3242. On the stock markets, the FTSE 100 is currently down 0.6% at 8631 and the Eurostoxx 50 is down 0.75% at 5386.
Sell America is back! The US dollar is falling and futures are sliding after Credit ratings agency Moody’s stripped the US of its top AAA credit rating (to AA1) and changed the outlook to stable from negative with the US national debt approaching $37 trillion and an annual deficit of $2 trillion or 6% of GDP. Fitch and S&P had already taken the US out of the top tier.
The European Union is working on a new sanctions package that will target the Russian financial sector in the latest effort by Ukraine’s allies to place pressure on President Vladimir Putin to negotiate a peace deal.
Pension funds cannot refuse Chancellor’s offer
Rachel Reeves has been compared to Marlon Brando’s character in The Godfather over her plans to force pension funds to buy UK assets, with Tom Selby, a pensions expert at investment platform AJ Bell, saying there was “something a bit Vito Corleone” about the Chancellor after it was revealed that she could order schemes to invest in domestic deals if they do not do so voluntarily. This came after the Treasury agreed a deal with 17 of Britain’s biggest workplace pension providers, with the firms agreeing to allocate at least 10% of their default workplace pension funds to riskier investments by the end of the decade. Of this, half is earmarked for the UK. Dame Amanda Blanc, head of insurer Aviva, said the Government’s stance was “a sledgehammer to crack a nut” and not “the right thing” to do.
Parents restrict salary growth over tax rates
Recent figures from HMRC suggest that parents are limiting their salary growth due to concerns over marginal tax rates. Many are earning just below key thresholds to retain childcare benefits, with nearly 1m taxpayers sitting under the higher-rate tax bracket of £50,271, a rise of over 50% in five years. The Centre for the Analysis of Taxation said that tax policy around parents is “hugely costly for everyone” and contradicts the Government’s aim to support growth.
Millions rely on bank branches
Financial Conduct Authority (FCA) data suggests that millions of people remain reliant on bank branches for essential services. Analysis from the City watchdog shows that more than 13m customers used bank branches last year, despite a shift to digital banking. The FCA’s Financial Lives report shows that 26% of all account holders used in-branch services in the year to May 2024, down from 63% in 2017. It was also found that 3.3m people – 7% of account holders – neither banked online nor used an app. This rose to 17% among those 65 and over and 46% for those aged 85 and over. Around a fifth of customers (21%) said they have seen a branch they had been using regularly close. Figures from consumer group Which? show that more than 6,000 branches have shut in the past decade.
‘Buy now, pay later’ lenders to face same rules as banks
New legislation will see buy now, pay later lenders fully regulated by the Financial Conduct Authority, meaning firms will be required to conduct affordability checks on consumers before offering loans.
House prices hit record high
House prices have hit a record high, with data from Rightmove showing that average property prices have risen 0.6% to £379,517 this month. While this was the fifth consecutive year that selling prices have risen in May, the increase was the lowest since 2016, with buyer demand falling after stamp duty increased in April. Rightmove also noted that a 14% surge in new properties coming to the market may have had an impact. Rightmove said demand in May has already risen after the Bank of England lowered the base rate to 4.25%, helping to push the average two-year fixed mortgage rate to 3.72% from 4.75% in May 2024.
Centrica calls for support for gas facility
Centrica chief executive Chris O’Shea has warned the UK’s largest natural gas storage facility will be decommissioned unless the Government steps in. Speaking on BBC One’s Sunday with Laura Kuenssberg, Mr O’Shea called for the Government to underwrite the business’ investments in the facility off the coast of East Yorkshire. Centrica, which owns British Gas, says the site is set to lose £100m this year.
Tax defaulters hit by £1.5bn in penalties since 2015
Over the past decade, HMRC has named and shamed over 4,000 tax defaulters, demanding more than £1.5bn in penalties. Mike Lewis, director of the think-tank TaxWatch, said that while this is “a serious amount of money,” it “could be the tip of an iceberg,” adding: “Many deliberate defaulter penalties focus on tax due on domestic income. Some of the largest tax evaders, particularly those with income and assets offshore, will have taxable income that HMRC may not even know about.” While HMRC has been regularly publishing the names and addresses of those who deliberately default on tax of more than £25,000 since 2015, tax defaulters can avoid the list if they “fully disclose details of the defaults” to the tax office. It is noted that HMRC’s list only includes those penalised under civil procedures and does not include criminal convictions for tax fraud. Mr Lewis says that while HMRC’s name and shame lists “look impressive … they’re missing the professionals that may know about or collude in their clients’ tax cheating.”
HMRC increases dawn raids in tax fraud crackdown
HMRC carried out an average of 12 property searches a week in the year to March 2024, according to law firm Pinsent Masons, with officials ramping up efforts to tackle tax evasion. HMRC officials carried out 648 dawn raids, up from 623 raids in 2022/23. In 2024, the tax gap – the difference between tax owed and tax collected – stood at £5.5bn. This represented 0.7% of all taxes owed. With the Chancellor having announced plans to raise over £1bn in additional gross tax revenue, HMRC has been given a £100m budget boost to add 500 more compliance officers. Steven Porter, head of tax disputes and investigations at Pinsent Masons, said: “The rise in dawn raids and the recruitment of more staff demonstrates the Government’s commitment to tackling tax evasion head-on.”
HMRC wealth crackdown pulls in £5.2bn
HMRC collected an extra £5.2bn in 2023/24 by cracking down on wealthy individuals, defined as those earning over £200,000 or with assets above £2m. This group paid £119bn in personal taxes – 25% of the UK’s total. Since 2019/20, compliance-related revenue from those in this wealth bracket has more than doubled from £2.2bn to £5.2bn. The National Audit Office suggests non-compliance may be higher than thought and urged HMRC to develop a clearer strategy. It is noted that the end of non-dom status has led some wealthy individuals to leave the UK, potentially reducing future tax revenue.
70s taxes not as tough on the rich
Mike Warburton, formerly a director at Grant Thornton, says that while the 1970s are often remembered for high tax rates, with the top income tax reaching 83% on earnings over £20,000 and 98% on unearned income, wealthy individuals managed to pay less tax due to numerous loopholes and a more lenient tax system. The current tax code is now over 23,000 pages long, compared to just 1,626 in 1976, reflecting a significant shift in tax regulations. Recent changes, such as the freezing of personal allowances and cuts to capital gains tax allowances, have increased the burden on higher earners, with the number of individuals paying the higher rate of tax rising from 3m in 2010/11 to over 6m today. Dan Neidle from Tax Policy Associates says the tax policies of the 1970s “failed to tax the rich effectively.”
Telecoms deal could spark more mergers
Experts believe Virgin Media O2’s proposed acquisition of Daisy Group could trigger a wave of telecoms mergers as the industry grapples with commoditisation, price competition and an ongoing need for infrastructure investment. Deloitte predicts an increase in European telecoms mergers this year, while PwC’s Global Telecom Outlook suggests a “sweeping reconfiguration” of the industry. However, competition regulators in several European countries have emphasised the need for infrastructure-based competition to ensure quality networks.
Poundland set to be sold
Poundland is set to be sold for a nominal fee, with some sources saying US-based investor Gordon Brothers, the former owner of Laura Ashley, has emerged as a frontrunner to take control of the retailer which is owned by Polish retailer Pepco. Several other turnaround investors have been linked with a bid, including Modella Capital, which recently acquired WH Smith’s high street business; Alteri, the owner of Bensons for Beds; and Hilco Capital, which owns Lakeland.
Banks could see £2.5bn boost from ring-fence reform
Analysis from RBC shows that Britain’s biggest lenders would see a significant cash boost if officials scrap the ring-fencing regime that requires major banks to separate their retail banking operations from their investment banking activities. In a letter to Chancellor Rachel Reeves in April, the bosses of HSBC, Lloyds, NatWest and Santander described the regime as “redundant” and warned that it is obstructing their ability to support business and the economy. The RBC report suggests that the banking sector would benefit by as much as £2.5bn if the ring-fencing rules were removed. NatWest would see a £530m boost, while Lloyds would be set for £480m in annual savings. Barclays would be set to save £240m and HSBC £300m.
Investors warned as cloning fraud surges
Investors are facing a significant threat from cloning fraud, with 478 reports of impersonation by scammers in the second half of 2024, according to the Investment Association. These scams resulted in a loss of £2.7m, with 23% of attempts being successful. The total number of cloning scams for 2024 reached 1,014, a notable increase from the 645 logged in 2023. Action Fraud received 25,843 reports related to investment fraud in 2024, with more than £649m lost as a result.
Fewer investors hold crypto
Figures from the Financial Conduct Authority (FCA) show that fewer people in the UK hold cryptocurrencies than two years ago. In May 2024, 2.3m people – or 4.3% of adults – owned crypto. This was down from 3.1m, or 5.8%, who did so in 2022. The FCA found that 75% of those with crypto assets said they recognised they could lose all their money, up from 65% in 2022. The data also shows that just one in ten of those holding crypto had invested in the past year.
Tax-free ISA allowance could be cut
Treasury ministers are exploring the possibility of reducing the £20,000 tax-free allowance on cash ISAs to stimulate investment in UK stocks and rejuvenate the London Stock Exchange. City Minister Emma Reynolds convened a meeting with executives from major banks, including NatWest and HSBC, to discuss potential changes ahead of a consultation on ISA market reforms. With over 18m people holding £300bn in cash ISAs, investment firms argue that reducing tax breaks could encourage a shift towards the stock market, potentially yielding higher returns for savers. However, UK Finance’s Plan for Growth report cautioned against such changes, urging the Government to “retain the annual tax-free cash Isa allowance of £20,000, to avoid restricting consumers’ options.” The Government is also considering reviving the British ISA, which would allow consumers to invest in UK businesses without incurring capital gains tax.
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Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
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And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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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Just call 020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email debtpurchase@cpa.co.uk today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
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