News in brief

2 April 2025: survey for users of UK financial statements; three UK Endorsement Board advisory groups seek members; review of the Office for National Statistics launched.

The UK Endorsement Board (UKEB) has launched a survey for users of UK financial statements. This comes as part of its research project on the Statement of Cash Flows and Related Matters, in response to the feedback on its Third Agenda Consultation. The survey takes around five to 10 minutes to complete and stakeholder comments are welcome until 11 April 2025.

The UKEB is also recruiting members for three of its standing advisory groups. They will replace members who are stepping down at the end of their three-year terms. The Academic Advisory Group, Accounting Firms & Institutes Advisory Group, and Preparer Advisory Group are all seeking two to three new members. The groups each meet up to three times per year and the closing date for applying is 29 April 2025.

The Government is seeking an independent investigation into the effectiveness of the Office for National Statistics (ONS). The Bank of England has previously criticised the statistics agency for the reliability of its job market data. Sir Robert Devereux will lead the review which will "assess the effectiveness of the ONS in delivering its core statistics", the BBC reported.

1 April 2025: tax paid by companies has nearly doubled in 10 years; 18 councils in England face insolvency over disability service debts; 57% of job centres reduce support due to shortages.

Businesses account for over a quarter of all UK tax receipts. Research by Thomson Reuters found the total paid by companies has almost doubled between 2014/15 and 2024/25. The sharp increase from £114bn to £215bn was driven by an increase in the rate of corporation tax. The current rate stands at 25%. The increase in employers’ national insurance will only add to businesses’ share of all tax receipts as the government seeks to raise some £24bn a year, City A.M reported.

So far, 18 councils have warned publicly that they are at risk of insolvency due to debts caused by years of overspending on special educational needs and disability services. Overspending on those services in England is forecast to grow by nearly £2bn over the next 12 months. Councils will see deficits rise by 54% on average. Many expect their accrued debts to increase by millions of pounds every month as they struggle to cope with soaring demand, with at least nine confirming their annual increase will exceed £50m. The deficits, currently totalling £3.4bn, will hit £5.2bn in 12 months, the Guardian reported.

Some 57% of job centres are reducing support for people claiming universal credit due to a shortage of work coaches. The National Audit Office said reasons for cutbacks included a lack of funding and challenges in recruiting and retaining staff. The number of claimants being categorised as requiring support rose by 400,000 to 3 million in one year, due to changes to income rules. The Department for Work and Pensions allows job centres to reduce support for claimants when caseloads are too high. There are currently 2,100 fewer work coaches than needed, the BBC reported.

31 March 2025: tax rise sees business hiring uncertainty remain; Santander eases mortgage rules so it can lend up to £35,000 more; WH Smith name departs High Street after £76m sale.

UK business remains pessimistic about hiring new staff, a new survey of more than 700 employers shows. Businesses “hoped for more” from the Spring Statement, according to the Recruitment and Employment Confederation. The research showed a “very gentle trend of improvements” in business confidence but both measures taken – confidence in hiring and confidence in the UK economy – remained in the red. Medium-sized and larger employers were more optimistic than small businesses as confidence among firms with up to 50 employees barely changed, City A.M reported.

Santander has relaxed its rules and will offer some borrowers up to £35,000 more to fund their home purchases. The mortgage lender said it had adjusted the way it calculated affordability, meaning many customers applying for a mortgage would be able to borrow between £10,000 and £35,000 more from Friday. It also reduced the rate it will stress test at by up to 0.75 percentage points. It was previously checking payments were affordable at 1 percentage point above its standard variable rate of 6.75%, but has reduced that to between 6% and 7%, the Guardian reported.

The name WH Smith is set to disappear from the High Street after the firm agreed to sell its shops to Hobbycraft-owner Modella Capital. The WH Smith name is not being sold and will still be used at the airport, railway station and hospital outlets that are also not for sale. Following the sale, Modella Capital will take over 480 stores in retail parks, shopping centres and on High Streets including 5,000 staff, the BBC reported.

28 March 2025: Easter egg costs soar by 50%; British Steel to close Scunthorpe furnaces risking 2,700 jobs; Next passes £1bn profit milestone.

Easter egg prices have risen by as much as 50% compared to last year, while some have shrunk in size. The price of chocolate has risen by 16.5% in a year, outpacing an overall 4.4% increase in the cost of supermarket food and drink. Shrinkflation, - when products get smaller but the price does not – has affected products and many supermarkets. For example, an 80g pouch of Terry's chocolate orange mini eggs cost 99p in Lidl in 2024 but was now 70g and cost £1.35. This was a net rise of 56%, the BBC reported.

British Steel plans to close its two blast furnaces and steelmaking operations in Scunthorpe. This could put up to 2,700 jobs at risk out of a out of a workforce of 3,500. It will bring an end to steelmaking in Scunthorpe after 160 years of production. British Steel argued that despite investment of more than £1.2bn by Jingye since 2020, the Scunthorpe site had run up losses of £700,000 a day. It is understood to have rejected a £500m state rescue package offered in a letter sent by business secretary Jonathan Reynolds, the Guardian reported.

Next has joined a small group of UK retail companies in reporting more than £1bn in annual profit. It’s profit before tax for the year to January 2025 was £1.01bn, up 10.1% year-on-year. Its share price rose more than eight per cent in early trades. It will return £286m of this to shareholders via ordinary dividends. The board proposed a final ordinary dividend of 158p, to be paid on August 1, City A.M reported.

27 March 2025: update on enhanced UK-Switzerland Trade Agreement; confidence drops among UK food and drink makers; clothes sales push inflation down.

The sixth round of negotiations on an enhanced Free Trade Agreement between the UK and Switzerland have taken place. The round focussed on financial services in particular, with both sides working to agree the most comprehensive chapter either country has signed. On digital trade they discussed provisions on data, source code and cryptography. Several chapters were provisionally closed during this round, including customs and trade facilitation, and transparency. The next round of negotiations is expected to take place in the UK in early summer 2025.

Confidence is tumbling among Britain’s food and drink manufacturers. This comes as inflationary pressures including energy, labour and raw material costs gain pace. Business confidence plummeted to -47% in the final three months of last year, according to the Food and Drink Federation, down from -6% in the previous quarter. More than half (54%) of businesses said taxation was the leading factor that would constrain investment over the coming year, while 52% said forthcoming regulation would act as a barrier to investment, the Guardian reported.

UK inflation fell by more than expected in February, driven by a drop in clothing and shoe prices due to an unusually high number of sales. Inflation decreased to 2.8%, down from a rate of 3% in January, according to the Office for National Statistics. Women's clothing was the biggest driver for the fall. Overall prices for clothing and footwear fell in the year to February for the first time since 2021, with children's clothing and accessories such as hats and scarves also having an impact, the BBC reported.

26 March 2025: financial management issues increasing among councils; cladding tax on new homes delayed for a year; PwC fined £2.9m over Wyelands Bank audit.

A new report has highlighted issues with financial management and governance faced by community councils. Audit Wales found councils increasingly failed to submit annual returns prepared in accordance with proper practices – leading to an increase in the number of qualified audit opinions being issued. Additionally, inadequate accounting records made it increasingly difficult to verify transactions, meaning councils were unable to demonstrate how decisions were made and value for money secured. Another frequent qualification issue was councils not publishing information they were legally required to do so.

Ministers have delayed a tax to fund the removal of unsafe cladding from homes. The Building Safety Levy will now be introduced from autumn 2026, rather than this year. The delay comes after developers warned it could increase building costs and result in the government missing its target to build 1.5 million homes by 2030. Ministers have set aside £5.1bn to resolve the cladding crisis, expecting developers, building owners and social housing providers to pay the rest, the BBC reported.

PwC has been fined £2.9m and reprimanded by the Financial Reporting Council for “serious failings” in its audit of the failed Wyelands Bank. The Big Four firm audited the bank’s accounts between 2015 and 2019. The lead auditor Jonathan Hinchliffe has been fined £50,000. His penalty was reduced to £33,412 and due to PwC’s “exceptional cooperation”, its fine was reduced from £4.5m, the Guardian reported.

25 March 2025: new inheritance tax rules to see 200,000 jobs cut; Teachers launch legal action over pension delays; UK mulls big tech tax changes to avoid US tariffs.

Family-owned businesses and farms across the UK are cutting jobs, halting investment and selling assets to stay afloat in response to sweeping tax changes. CBI-Economics research found that the tax overhaul is expected to result in more than 208,000 job losses by the end of this Parliament. It has also projected a net fiscal loss to the Treasury of £1.9bn, undermining its own revenue expectations, City A.M reported.

Teachers have launched group legal action against the government over pension issues. The NASUWT union says staff have been caused “intolerable strain” because of delays and maladministration by the Teachers’ Pensions Scheme. For some, pension processing delays have left them unable to get divorced. The problem involves the processing of requests for cash equivalent transfer values, which are required to calculate the value of a pension pot, the Guardian reported.

UK taxes on big tech firms may be changed as part of a deal to avoid US President Donald Trump's next raft of tariffs. Chancellor Rachel Reeves said talks were "ongoing" about tweaks to the Digital Services Tax, which affects global tech giants like Amazon and Meta. The 2% levy introduced in 2020 raises about £800m a year for the UK. It could possibly be altered in exchange for the US not imposing more import taxes on the UK, the BBC reported.

24 March 2025: inheritance tax receipts reach record high; broadcasters fined £4m for freelance pay collusion; US-EU trade war could cost Ireland more than £15bn.

Inheritance tax receipts totalled £7.6bn in the last 11 months, City A.M reported, a record high and surpassing last year’s full-year total of £7.5bn. Data from HMRC revealed today that the amount paid in tax was an 11.8% increase from the same period last year. “It may only affect a small percentage of estates, but that number is growing,” said Nicholas Hyett, investment manager at Wealth Club. The Office for Budget Responsibility has forecast that nearly 10% of estates will pay inheritance tax by 2030, due to increasing house prices, changes to tax rules and years of allowance freezes. The main inheritance tax allowance has now been frozen at £325,000 for 15 years and is set to remain frozen for another five years.

Four of the UK's biggest sports broadcast and production companies have been fined more than £4m, the BBC reported, for illegally colluding on freelance pay rates. The UK's competition regulator said the BBC, BT, IMG and ITV must pay a combined £4.24m after being found to have shared information about fees for freelance workers including camera operators and sound technicians. Sky also admitted breaking the law but avoided a fine after alerting the Competition and Markets Authority (CMA) to its involvement before the investigation began. Freelancers are used by all five firms to create sports content and work on productions of live matches and events.

A trade war between the US and the EU could cost Ireland more than £15bn, trigger waves of job losses and cause US multinationals to relocate, according to a report co-authored by the Irish government. Ireland’s GDP could shrink by 3.7% over the next five to seven years under the worst-case scenario, in which Donald Trump imposed 25% tariffs on all exports on the EU and the EU retaliated with counter-tariffs, the study carried by the Economic and Social Research Institute (ESRI) found. A Trump slump would be unavoidable whatever the tariff scenario, it found. If the US president imposes 10% tariffs on all global imports, the impact would be significant, with Irish GDP dropping by 3.2% compared with a no-tariff scenario, the study showed, The Guardian reported.

21 March 2025: 21.5% of UK adults not looking for work; OECD government debt costs at highest since 2007; EY plans senior partner layoffs.

Big four firm EY is set to lay off dozens of senior partners. This will be part of its most significant redundancy plan in decades, amid a slowdown in consultancy spending. EY currently has 894 equity partners and 757 non-equity partners, which jointly own and manage the firm, though the latter group do not share in its profits. It employs some 20,000 people in the UK. EY has recently struggled with a slowdown in consultancy spending, both from private businesses and imminent plans from the government to slash spending on outside consultants, City A.M reported.

The cost of government debt payments in the world’s richest nations last year reached its highest level since 2007. Across the Organisation for Economic Co-operation and Development, debt service costs as a percentage of national income rose to 3.3% in 2024, from 2.4% in 2021. This outstrips the amount spent on defence (2.2%), police and public order services (1.7%) and housing (0.7%), its Global Debt Report found. OECD governments raised $15.7tn (£12.1tn) in fresh borrowing in 2024, which amounted to $3tn of extra debt once repayments were included. That took the total amount of OECD government debt to $55tn. The stock of global sovereign debt reached $65.2tn after a small rise in non-OECD government borrowing. Corporate debt rose to $35tn.

More than a fifth of UK working-age adults are still not in work or actively looking for work. The UK economic inactivity rate was 21.5% in the three months to January, marking a drop from both the previous quarter and year, and is relatively low compared with trends since 2009. Labour has targeted an employment rate of 80%. It currently stands at 75%, the BBC reported.

20 March 2025: stress costs UK professional services firms £4m a year; AI to boost second-hand fashion sales; Google to pay $28m in racial bias lawsuit.

Nearly half (45%) of the professional services workforce is stressed, causing significant financial impacts on businesses. Walking on Earth research found employee stress is costing British businesses more than £4m a year. People not showing up to work cost UK businesses nearly £1,400 per person yearly, while presenteeism is an even higher cost at over £1,900 per employee, City A.M reported.

Artificial intelligence looks likely to boost sales of second-hand clothing. Global sales rose 15% last year, more than four times faster than the wider market, and are expected to rise by a further 11% this year as new digital tools help shoppers to find the items they want. Pre-loved clothing items now account for $227bn (£175bn) or 9% of total fashion sales. The figure represents a big leap over the past five years and has led to resellers eating into the market share of major clothing retailers, the Guardian reported.

Google has agreed to pay $28m (£21.5m) to settle a lawsuit that claimed it promoted with a racial bias. The class action lawsuit was filed for at least 6,632 people who were employed by Google between 15 February 2018 and 31 December 2024. It claimed white and Asian employees were given better pay and career opportunities than workers from other ethnic backgrounds and referenced leaked internal documents showing different compensation for similar work, the BBC reported.

19 March 2025: MHA eyes London AIM listing; Germany to vote on defence spending increase; FCA fines Crispin Odey £1.8m and ban from City.

MHA is set to float on trading on AIM, a market operated by the London Stock Exchange, in the coming weeks. The UK arm of audit and advisory firm Baker Tilly is seeking to raise up to £125m through a placing of ordinary shares. It also intends to offer retail investors the chance to subscribe for new ordinary shares at the issue price, aiming to raise up to approximately £6m before expenses.

Germany's Parliament, the Bundestag, is voting on whether to increase defence spending. The proposal says any spending on defence that amounts to more than 1% of Germany's GDP would no longer be subject to a limit on borrowing. Until now this debt ceiling has been fixed at 0.35% of GDP. Defence spending in Germany rose by 23.2% last year, helping to drive a record 11.7% rise in European defence outlay. Such a move could free up €500bn (£420bn) for German infrastructure – fixing bridges and roads and paying for climate change measures – while removing the restrictions in the constitution on borrowing could potentially free up unlimited billions of euros for defence spending, both for Germany's armed forces and for the recently announced €800bn ReArm Europe Fund, the BBC reported.

Hedge fund manager Crispin Odey will be banned from the City and hit with a £1.8m fine by The Financial Conduct Authority (FCA). The verdict concluded for he deliberately attempted to “frustrate” a disciplinary process into sexual harassment allegations after he was accused of “reckless disregard” for the governance of his hedge fund. Odey Asset Management (OAM) first launched an internal investigation in September 2020, uncovering numerous sexual harassment allegations against him by female staff. The FCA said Odey then tried to obstruct OAM’s leadership from taking any action, including firing its entire executive committee twice, the Guardian reported.

18 March 2025: Thames Water's £3bn rescue deal cleared by court; supermarkets’ shares drop amid Asda cuts; 25% of young workers considering quitting the workforce.

A £3bn rescue loan for Thames Water is set to go ahead after an appeal against the deal was dismissed. This extra funding allows the UK's largest water company to continue operating for at least another 12 months giving it time to restructure its nearly £20bn in debt and try to attract new investment. The initial tranche of £1.5bn will be provided in instalments over the coming months, the BBC reported.

More than £3.5bn has been wiped off the value of Tesco, Sainsbury’s and Marks & Spencer’s stock since Friday. This comes amid fears that rival Asda will step up the grocery price war. The UK’s third-biggest supermarket chain said its profits were likely to drop this year as it invested more in cutting prices and putting more staff in shops. Tesco’s share price then fell 10%, Sainsbury’s down 8% and Marks & Spencer’s 7%, the Guardian reported.

A quarter of British 18–24-year-olds have considered leaving the workforce in the last year. The PwC report findings are a sign of the increasing impact of economic inactivity spreading across the UK. Among all UK workers, 10% are currently actively considering leaving work for an extended period, with a further 20% having considered leaving in the last year. The news comes as a staggering 90% of employers state that they are concerned about a rising wave of economic inactivity.