Business news 27 February 2025
Tax changes threaten family businesses. Defence pledge could push up taxes. Nvidia, tariffs, tax, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Tax changes threaten family businesses
Shadow Chancellor Mel Stride has condemned proposed changes to business tax relief, warning that they could lead to many family-run businesses “shutting down or being forced to sell.” He has also highlighted concerns from business leaders who say that the tax changes would disadvantage local businesses compared to larger competitors. The current 100% relief on business property inheritance tax will be reduced from April 2026, with only the first £1m of qualifying assets receiving full relief. A report from the CBI says that these changes could cost the UK £2.6bn due to decreased hiring and investment, with family businesses projected to cut investment by 17% by 2030.
Defence pledge could push up taxes
Keir Starmer’s pledge to raise the defence budget to 3% of GDP by 2034 poses significant challenges, analysts have warned. Currently, defence spending is set to increase to 2.5% of GDP by 2027, funded by cuts to the foreign aid budget. Ben Zaranko from the Institute for Fiscal Studies said: “Getting towards 3% of GDP will eventually mean more tough choices and sacrifices elsewhere – whether higher taxes, or cuts to other bits of government,” while Ruth Gregory, deputy chief UK economist at Capital Economics, suggested that the Government is close to breaching its fiscal rules, necessitating either tax increases or spending cuts of 0.5% of GDP.
Tariffs unlikely to spark persistent inflation
Bank of England rate-setter Swati Dhingra says the risk of President Donald Trump’s tariffs driving persistent inflation in the UK is relatively low. In a speech at the National Institute of Economic and Social Research, she said: “The direct effect of US import costs and dollar strengthening are likely to be offset by reduced global price pressures.” Ms Dhingra, a member of the Monetary Policy Committee, suggested it is likely that UK imports from elsewhere would get cheaper as exporters searched for “new markets” outside of the US.
UK businesses stand firm on diversity
MP Justin Madders says UK firms will maintain their own approach to equality, despite pressure from the US government to reduce diversity initiatives. This comes as several large US companies, including Google and Amazon, have scaled back their diversity programmes following Donald Trump’s presidency. In contrast, UK firms like Deloitte and Barclays have reaffirmed their commitment to diversity and inclusion. Mr Madders emphasised that British companies recognise the value of diverse leadership and will continue to prioritise inclusion, saying: “I think the commitment and the benefits are very clearly laid out.” On the possibility on a shift away from diversity initiatives, he added: “I don’t see UK companies going down that road.”
Taxman tightens grip on unpaid taxes
HMRC is intensifying its efforts to recover unpaid taxes linked to the controversial “loan charge” scandal, with the tax office potentially resorting to debt collectors despite previous efforts to claw back money having been linked to a number of suicides. Approximately 60,000 individuals face substantial tax bills due to participation in “disguised remuneration schemes” that avoided income tax and National Insurance contributions. As the April 5 deadline approaches, HMRC is sending “determination” letters to those who failed to file their 2018 to 2019 tax returns, threatening debt collection if payments are not made.
HMRC targets side-hustlers
HMRC has launched a crackdown on online sellers who do not report their income from side-hustles to the Treasury. Using data received from online marketplaces such as Vinted, eBay and Airbnb, the tax office will send ‘nudge’ letters to sellers that may need to bring their tax affairs up to date. Dawn Register, a tax dispute resolution partner at BDO, advises recipients that it “often pays to come clean at an early stage,” noting that unpaid tax may be subject to late payment interest and warning that there may be other penalties, “depending on the nature of the reasons for non-compliance.”
Markets
Yesterday, the FTSE 100 closed up 0.72% at 8731.46 and the Euro Stoxx 50 closed up 1.47% at 5527.99. Overnight in the US the S&P 500 closed flat at 5956.06 and the NASDAQ rose 0.26% to 19075.26.
Yesterday evening as global investors paid close attention, Nvidia delivered yet another impressive quarterly report, blowing away Wall Street estimates as it ramps up production of its latest server chip Blackwell. Revenue for the fourth quarter, which ended on January 26, grew 78% from the year-ago quarter to a record $39.3 billion. This was ahead of Nvidia’s guidance of $37.5 billion plus or minus 2% and Street estimates of $38 billion. Data center revenue grew 93% from the year-ago quarter to a record $35.6 billion. The chip designer heralded strong demand for their Blackwell chip. Still, analysts are marking them as good but not great. Attention now moves to the rollout of their expected new chip “Reuben”
Donald Trump said the US would not give Ukraine security guarantees “beyond very much” as the countries prepared to sign a deal on raw materials.
Mr Trump also said that he planned to impose a 25% tariff on imports from the European Union, stating the bloc had been “formed in order to screw the United States”. Mr Trump said the levies would apply to “cars and all other things”.
This morning on currencies, the pound is currently worth $1.267 and €1.209. On Commodities, Oil (Brent) is at $73.0 & Gold is down at $2886. On the stock markets, the FTSE 100 is currently up 0.12% at 8741 and the Eurostoxx 50 is down 0.69% at 5490.
European stocks have stepped back from yesterday’s record high in early Thursday trading, with declines led by automakers on renewed tariff uncertainty from the US.
Rolls-Royce shares are soaring as much as 16% to a fresh record as the jet-engine maker’s results beat estimates (a 55% rise in profits) and the outlook is upgraded.
Bitcoin ETF’s saw their biggest one day outflow as investors removed more than a billion dollars from the exchange traded funds.
Gatwick
The government has backed a second runway at Gatwick Airport, providing measures to reduce noise are put in place. Transport Secretary Heidi Alexander said she was “minded to approve” the expansion. Although some MPs, local authorities and residents are strongly opposed. The airport wants to move its northern runway, which is currently only used for taxiing or as a back up, and make it operational by the end of the decade. The £2.2bn expansion will be funded through private investment.
City voices concerns over private market
City figures have raised concerns over the Financial Conduct Authority’s plan for a platform that will allow private firms to trade shares at intervals. Officials say that Pisces – the Private Intermittent Securities and Capital Exchange System – will act as a “stepping stone” for firms considering a public float while giving investors an opportunity to sell their stakes in companies. Delphine Currie, a partner at law firm Reed Smith, said that because businesses will not be able to use Pisces to raise new money as it will only be for secondary trading, “it may be of limited interest to companies,” while an unnamed partner at a leading venture capital firm suggested that the platform is “a bold solution to a problem that is far more complex than the protagonists are willing to understand.” James Tyler, a barrister at Peters & Peters who was formerly an FCA prosecutor, commented: “The devil will be in the detail, but done badly, Pisces could be a fraudster’s charter.”
FCA to review conflict of interest in private markets
The Financial Conduct Authority (FCA) is to look at potential conflicts of interest at firms managing private assets, with the City watchdog set to explore whether there are adverse effects on investors. In a letter to leaders of asset management companies, the FCA said it will “assess how firms oversee application of their conflict-of-interest framework through governance bodies … to ensure investor outcomes are not compromised.” It added: “With rapid growth in private markets, we expect to see evolving and updated procedures to identify, manage and mitigate conflicts of interest.” The regulator has also announced that it is close to releasing the results of an earlier investigation into private market valuation practices.
Half of financial firms lack AI strategy
A study by Forvis Mazars shows that while financial services firms believe they are ready for AI, just 43% have a well-developed AI strategy. In the poll of 50 executives from firms with turnover of at least £500m, 51% said they have piloted AI solutions. It was found that 31% of firms have set clear objectives for AI use, while 25% are actively prioritising investment in data improvements. Two-thirds (65%) of executives said human oversight and regulation alongside AI was essential. On barriers to adopting the technology, 57% cited data quality, with cyber security and cost return on investment also ranking high.
Price gap between flats and houses widens
Zoopla has reported a significant 67% price gap between the average UK flat, valued at £191,300, and the typical house, priced at £319,500. The average value of a flat has increased by 7% over the past five years, while the average price of a house has risen by 24%.
BP
BP is scrapping many of its environmental promises, slashing spending on renewable energy and refocusing on fossil fuel production.
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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.
All of the above services and other complimentary services such address verification, are included in your subscription!
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!
If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA’s collection department for purchase on recourse?
CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.
Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.
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
Have you been paid late by business customers in the last six years?
Maybe you no longer work with them. Under legislation, you are entitled to compensation you for those late payments you have suffered.
You put up with the PAIN – now claim the GAIN!
Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!
CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients
Check our compensation calculator to see how much your business could be owed!
Discover NOW the potential value of late payment compensation hidden in your sales ledger!