The jobs carnage that business groups warned would follow the chancellor’s tax increases is no longer a forecast. It is showing up in the numbers.

New research from Rathbones reveals that one in five UK small and medium-sized businesses cut staff over the past year, with hospitality firms bearing the heaviest burden. More than a third of hospitality SMEs reported making redundancies, well above the average across all sectors, and 69 per cent said increased taxation or regulation now represents one of the biggest threats to their survival.

The principal culprits are not hard to identify. Employer national insurance contributions rose from 13.8 per cent to 15 per cent in April 2025, while the threshold at which the charge kicks in was slashed from £9,100 to £5,000 per employee. Taken together, the changes amount to a £25 billion hit on business payrolls, a burden that falls disproportionately on labour-intensive small firms that cannot easily absorb the cost through automation or scale.

The Rathbones survey paints a picture of businesses that have already exhausted the obvious coping strategies. Seventy per cent cite rising costs as the single biggest threat to their business. Fifty-eight per cent point to taxation and regulatory burdens. Business rates and employer NICs are singled out as the most painful pressure points.

What is particularly telling is how businesses are adapting. Nine per cent have increased their use of freelancers and contractors, a shift that reduces NICs liability but carries its own risks under tightening employment status rules. Another nine per cent have moved towards part-time or flexible roles, restructuring their workforce to manage the per-head cost of employment.

For hospitality and retail businesses, where margins have always been thin and where staff costs represent the largest single expense, the arithmetic has become brutal. A small restaurant employing fifteen people on or around the national living wage will have seen its annual NICs bill rise by several thousand pounds, on top of the minimum wage increase itself. Add business rates, energy costs and food price inflation, and the operating model that worked two years ago may simply no longer be viable.

More than half of SME leaders surveyed, 51 per cent, said that targeted relief on business rates or employer NICs would directly support their ability to grow and invest. That is not a request for handouts; it is a statement of economic reality from the businesses that employ the majority of the UK workforce.

The danger for the wider economy is that small firms respond to the cost squeeze not by cutting once and recovering, but by permanently downsizing their ambitions. A business that lays off two people this year and decides not to replace them next year is a business that has quietly accepted a smaller future. Multiply that across hundreds of thousands of firms and the aggregate effect on employment, productivity and growth becomes significant.

For small business owners navigating these pressures, the immediate priority is honest cash flow planning. Hoping that costs will ease or that relief will arrive in the next Budget is not a strategy. The businesses that come through this period in the best shape will be those that have looked hard at their numbers, made difficult decisions early and found ways to protect the core of their operation, even if that means a leaner version of what they had before.

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One in five small firms have already cut staff – and the worst may not be over

Ambitious smaller companies hunting for a route onto the national stage have been handed an unusually tangible incentive.

ITV has struck a media partnership with the Lloyds British Business Excellence Awards that will hand one winning British business £500,000 of airtime across the broadcaster’s channels and its ITVX streaming service in 2026.

Organisers believe the package, christened the ITV Growth Accelerator Award, is the most commercially valuable prize ever attached to a single company by a UK business awards programme. Rather than simply recognising achievement with a trophy, the new category is pitched as a working growth tool: a half-million-pound marketing budget that most scaling firms could not ordinarily contemplate.

The award is aimed squarely at companies that have built strong momentum regionally and are now straining against the limits of their local reach. Judges will be looking for evidence of rapid growth, credible leadership and a clear appetite to expand at pace, with the winner gaining access to audiences numbering in the millions across ITV’s linear schedule and on-demand platform.

Kate Waters, director of client strategy and commercial marketing at ITV, said television remained one of the quickest ways for an emerging brand to build recognition, win customers and establish credibility. The prize, she added, was intended to strip away the cost barrier that typically keeps smaller firms off the nation’s screens.

For the awards programme, the tie-up marks a deliberate shift in philosophy. Sarah Austin, the awards director, said British companies were operating in a difficult economic climate and that the partnership was designed to reward performance with practical commercial firepower rather than applause alone. The aim, she said, was not only to celebrate success but to help manufacture it, giving one standout business the chance to reset its growth trajectory through mainstream television exposure.

The Lloyds British Business Excellence Awards has long been regarded as a bellwether for the health of UK enterprise, spanning leadership, innovation, customer experience and sustainable growth across firms of every size. The 2026 ITV partnership suggests that business awards are increasingly expected to do more than hand out silverware, and that for owner-managed companies with ambitions beyond their postcode, the prize on offer this year may be worth taking seriously.

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ITV dangles £500,000 TV advertising prize for Britain’s fastest-growing smaller firms

Barclays is returning to the high street. After shutting roughly four in five of its branches since 2019, the lender has confirmed it will open new sites, expand existing ones, and bring back a title that many small business owners will remember fondly: the bank manager.

The shift, outlined by Barclays UK chief executive Vim Maru in his first interview since taking the helm in 2024, represents a sharp break from the cost-cutting orthodoxy that has thinned Britain’s branch network for the best part of a decade. It also lands at a moment when app-based challengers, Revolut and Wise among them, are pushing harder into the current account market that has long been Barclays’ bread and butter.

Maru told The Times that pausing branch closures was one of his “early decisions” at the top, and confirmed the lender would grow beyond its current estate of 206 sites. He said he believes the future of banking lies in combining “great digital and great human touch” — a pitch squarely aimed at customers, particularly smaller firms, who tire of being routed through chatbots.

For Britain’s 5.5 million small businesses, the move could prove significant. Owner-managers have long complained that the retreat from physical branches left them without a familiar face to call on for cash handling, lending conversations, or the sort of judgement calls that algorithms struggle with. Maru acknowledged as much, saying innovative businesses in particular “love a bit of human touch”.

Barclays has gone further than any of its major rivals in culling branches, and Maru stopped short of conceding the bank moved too fast. But he said lenders should periodically reassess how they serve customers, and restoring recognisable job titles was part of that. Most customers, he suggested, still want to sit down with a bank manager from time to time.

The new branches will sit alongside the shared banking hubs run through the Post Office, where the big lenders pool services under one roof. Maru did not put a number on the planned openings.

Barclays UK, which employs roughly a third of the group’s 90,000 staff, covers personal accounts and small business banking, and now includes the Tesco credit card arm bought in 2024 and Kensington Mortgages, acquired in 2023 and since doubled in size. The division is central to chief executive CS Venkatakrishnan’s pledge to plough an extra £30 billion into the UK between 2024 and this year.

Maru played down speculation linking Barclays to bids for Santander UK, TSB or wealth manager Evelyn, insisting the focus is on organic growth. He pointed to record mortgage applications last year and faster processing, brokers can now submit an application in 15 minutes, down from 45.

Artificial intelligence is being folded into back-office processes to free up staff time for customer conversations. Asked whether jobs would go, Maru drew a parallel with the arrival of the ATM, which did not wipe out cashiers but instead saw staff redeployed into fraud prevention as scams proliferated.

On the economy, Maru said Barclays’ spending data showed “a bit more anxiety” since the start of the Iran conflict, but that households were largely carrying on. Fuel spending spiked in the first week of the war as drivers filled up ahead of feared price rises, before normalising. Hospitality spending, he added, has “held up”, a modest but welcome signal for small operators across the country.

For small firms weighing up where to bank, the message from Canary Wharf is that the branch is no longer a relic. Whether rivals follow, or leave Barclays to reclaim the high street on its own, will shape the shape of British business banking for years to come.

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Barclays reopens the high street door as digital-only rivals circle

Barclays is pulling back from lending to smaller businesses and private credit firms after suffering losses linked to the collapse of high-risk lenders, in a move that signals a broader shift towards caution across the banking sector.

The bank is understood to be reducing its exposure to asset-based lending for smaller borrowers while redirecting capital towards larger, more established corporate debt providers. The change in strategy follows the failure of firms such as Market Financial Solutions and Tricolor Holdings, which have exposed vulnerabilities in the fast-growing private credit market and triggered losses for multiple financial institutions.

In response, Barclays has reportedly withdrawn from a number of lending deals and increased pricing on others to reflect the heightened risk environment. The move reflects a wider reassessment of private credit, a sector that has attracted investors with returns often quoted between 8 and 10 per cent, but which relies heavily on leverage to generate those yields.

Recent events have highlighted structural weaknesses in private credit, including concerns around transparency, asset valuations and the sustainability of returns in a higher interest rate environment. As borrowing costs rise, pressure on borrowers has increased, leading to higher default risks and a reassessment of the sector’s resilience.

The collapse of Market Financial Solutions has been particularly damaging. The lender entered administration earlier this year after a High Court judge ordered an investigation into alleged fraud and financial mismanagement. Insolvency practitioners have since pointed to “compelling evidence” of serious irregularities, including the possibility that some loans may be entirely unsecured.

Central to the investigation are allegations of “double pledging”, where the same asset is used as collateral for multiple loans, a practice that can leave lenders exposed to significant losses if borrowers default.

Barclays chief executive C.S. Venkatakrishnan acknowledged the issue, describing the bank’s exposure as “disappointing”, although he indicated that total losses are expected to remain below £500 million.

The bank’s actions in the lead-up to the collapse have also come under scrutiny. Barclays froze Market Financial Solutions’ accounts in November, a move that insolvency practitioners suggested may have been prompted by concerns over potential money laundering or other financial irregularities. Investigations are ongoing, including oversight from the Financial Conduct Authority.

The fallout has extended beyond the UK, with the collapse of Tricolor Holdings adding to concerns about the stability of private credit markets globally. The US-based lender’s failure has reinforced fears that the sector may be entering a more challenging phase after years of rapid expansion.

Investor sentiment has also shifted, with some private credit funds restricting withdrawals amid growing uncertainty. Analysts say this reflects the sector’s first meaningful stress test since its post-financial crisis boom.

Barclays’ decision to pivot away from smaller borrowers raises concerns about access to finance for small businesses, particularly those reliant on asset-based lending and alternative credit providers.

As banks tighten lending criteria and reassess risk exposure, smaller businesses may find it more difficult, and more expensive, to secure funding, potentially slowing investment and growth.

The move underscores a broader recalibration within financial markets, where the pursuit of higher returns is increasingly being balanced against the need for stronger risk management.

For Barclays, the shift towards larger corporate clients reflects a more conservative stance in an environment marked by economic volatility and rising credit risk.

As investigations continue and the full extent of losses becomes clearer, the consequences are likely to be felt across both the banking sector and the wider economy, particularly for smaller businesses navigating an increasingly constrained funding landscape.

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Barclays retreats from small business lending after private credit shocks

The UK government has set out plans to channel more than £7.4 billion a year directly to small businesses by 2028, in a major push to rebalance public spending and drive economic growth across local communities.

For the first time, individual government departments have been given specific targets for how much they must spend directly with small and medium-sized enterprises (SMEs), marking a significant shift in procurement strategy.

The move forms a central pillar of the government’s Plan for Small Business and is designed to increase access to public contracts for smaller firms, which have historically struggled to compete with larger suppliers.

Under the new system, departments will be required to publish annual progress reports detailing their small business spending, with those falling short expected to outline corrective measures.

Targets vary across departments, with some of the highest commitments including 40% for the Department for Science, Innovation and Technology, 33% for the Department for Culture, Media and Sport, and 30% for the Cabinet Office. Nearly half of all departments have set targets above 20%, meaning that at least one in every five pounds of public spending in those areas will go directly to SMEs.

The initiative is expected to unlock significant opportunities for businesses across sectors such as manufacturing, cyber security, finance and science.

Cabinet Office minister Chris Ward said the policy represents a clear commitment to supporting British enterprise.

“These ambitious spending targets will help ensure more government contracts go to SMEs, keeping more money, jobs and opportunities in local communities,” he said.

The headline £7.4 billion figure relates to direct spending, but officials note that the total benefit to SMEs will be significantly higher when indirect spending through supply chains is taken into account.

In addition, the Ministry of Defence is set to increase its SME spending by a further £2.5 billion, reaching £7.5 billion by May 2028, further boosting the overall impact.

The policy is intended to stimulate regional economies, support job creation and strengthen the UK’s private sector by ensuring that smaller firms can access stable, long-term revenue streams through government contracts.

Small Business Minister Blair McDougall said the changes would open up “lucrative opportunities” for thousands of firms.

“Increasing procurement spend with SMEs is a national priority to drive growth across the UK,” he said.

Business groups have broadly welcomed the announcement, particularly the introduction of clearer transparency and accountability measures.

Federation of Small Businesses policy chair Tina McKenzie said the targets were a necessary step to reverse a decline in SME participation in government contracts since 2022.

“Understanding exactly how much central government spends directly with small businesses is essential for holding departments to account,” she said, adding that the new framework should serve as a foundation for even more ambitious commitments in the future.

Industry leaders also highlighted the broader benefits of engaging SMEs, including increased innovation, flexibility and value for money in public procurement.

Rob Levene, chair of procurement platform Constellia, described the move as a “pivotal moment” for smaller firms that have historically been excluded from government contracts due to complexity and cost barriers.

The spending targets build on a series of recent measures aimed at strengthening the SME ecosystem, including legislation to tackle late payments and a £4 billion funding package to improve access to finance.

Together, these initiatives reflect a more interventionist approach to economic policy, with the government seeking to use procurement as a lever to support growth and rebalance the economy.

For SMEs, the changes could represent a significant expansion of opportunity, provided departments meet their targets and procurement processes become more accessible.

As the policy is rolled out, the key test will be whether increased spending translates into tangible outcomes for businesses on the ground, helping them scale, innovate and contribute to long-term economic resilience.

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Government sets £7.4bn small business spending target to boost local growth and jobs

Large UK companies could face multimillion-pound fines for persistently paying suppliers late under sweeping new legislation designed to protect small businesses and improve cashflow across the economy.

The Department for Business and Trade has confirmed that the Small Business Commissioner will be granted new enforcement powers to investigate poor payment practices and penalise companies that fail to meet required standards.

At the heart of the reforms is a mandatory 60-day payment deadline for all commercial contracts involving businesses with revenues above £54 million. The measure aims to set a clear upper limit on payment terms, which have often stretched far beyond this in practice.

Suppliers will also gain stronger financial protection, with a statutory right to charge interest on late invoices at a rate of 8 per cent above the Bank of England base rate.

Ministers say the changes represent the most significant overhaul of payment laws in a generation.

Business Secretary Peter Kyle said late payments were a major cause of business failure and described the reforms as “simply unacceptable” to delay.

“We are unveiling the strongest, most robust changes to payment laws in over a generation,” he said, adding that the measures would transform the outlook for small firms and reduce time spent chasing overdue invoices.

In addition to financial penalties, companies found to be persistently late payers will be required to publicly explain their behaviour in annual reports, including detailing corrective actions.

The government is also consulting on tighter rules around retention payments in the construction sector, a long-standing issue where funds withheld by large contractors can be lost entirely if a company collapses.

Business groups have broadly welcomed the move, though some argue the reforms do not go far enough.

Federation of Small Businesses policy chair Tina McKenzie said the measures would help end the practice of large firms effectively using smaller suppliers as a source of “free credit”.

However, she noted that a 60-day payment window still falls short of what many consider “prompt payment”, suggesting the ultimate goal should be a 30-day standard.

Emma Jones said the enhanced powers would allow her office to act more effectively, reducing the administrative burden on small businesses.

“Less time chasing debt means more time focusing on growth,” she said.

Late payments have long been identified as a structural problem within the UK economy, particularly for smaller firms with limited cash reserves.

Government data suggests that dozens of businesses close each year directly as a result of delayed payments, with the ripple effects extending across supply chains and local economies.

The new legislation is intended to address this imbalance by shifting both the financial and reputational cost of late payment onto larger companies.

The reforms will be introduced through legislation “as soon as parliamentary time allows”, with ministers also assessing the readiness of businesses to adapt to the new rules.

If implemented effectively, the measures could mark a turning point in how commercial payment practices are enforced in the UK, and provide much-needed stability for small businesses operating in an increasingly challenging economic environment.

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Big firms face multimillion-pound fines under crackdown on late payments

The Government has announced it will launch a 12-week consultation on whether the Engineering Construction Industry Training Board (ECITB) and the Construction Industry Training Board (CITB) should merge to form a single statutory training body for the construction and engineering construction sectors.

The consultation, expected to begin in March, follows an independent review published in January 2025 which examined the effectiveness and future role of the two Industry Training Boards (ITBs). While the review reaffirmed the importance of both organisations in addressing chronic skills shortages, it recommended strengthening their role and increasing collaboration, including the option of operating as a unified body.

The proposal comes at a pivotal moment for the sector, with the Government placing construction and engineering construction at the heart of its economic growth agenda and its ambition to become a clean energy superpower by 2030.

Andrew Hockey, chief executive of the ECITB, said the industries are central to delivering the Government’s missions around growth, good jobs and decarbonisation.

“Construction and engineering construction are critical to meet the Government’s missions for growth, good jobs and for the UK to become a clean energy superpower by 2030,” he said.

Hockey emphasised that while closer collaboration between the boards is already under way, any structural change must safeguard the specific workforce needs of the engineering construction industry (ECI), which spans heavy industrial sectors including oil and gas, nuclear, renewables, chemicals, hydrogen, pharmaceuticals and water treatment.

Research commissioned by the ECITB forecasts that the ECI alone will require an additional 40,000 workers by 2030 to meet project demand across energy transition and infrastructure programmes.

“Whatever the outcome of this consultation, it is important the distinct skills and workforce needs of the engineering construction industry continue to be supported,” Hockey said. “Any changes to how the ITBs are structured should not detract from the urgent need to attract, develop, qualify and retain skilled workers now.”

He added that while preliminary transition planning has begun with the Department for Work and Pensions and the CITB, no final decision has been made. The existing ECITB levy order for 2026–28 is expected to proceed as planned following its recent consensus vote.

Tim Balcon, chief executive of the CITB, said the consultation reflects the Government’s wider construction skills strategy, including a £600 million package announced last year to address workforce shortages.

“The Government is committed to getting Britain building again,” he said. “This is recognition of how vital the construction industry is, not just to the Government’s own homebuilding and infrastructure development ambitions, but as a crucial cog in the wider economy.”

Balcon stressed that, regardless of the consultation’s outcome, collaboration between the boards is essential to deliver standardised competence frameworks, alternative entry routes and improved access to high-quality training.

He pointed to ongoing joint work on major infrastructure projects such as Sizewell C, where both civil construction and engineering construction skillsets are required at different stages of delivery.

“Nuclear new build is a clear example where both the civil construction workforce and the ECI workforce work alongside each other,” he said.

The January 2025 independent review concluded that the ITBs play an important role in tackling skills shortages but argued that stronger alignment and governance reform would enhance impact. It suggested that operating as a single body could improve strategic workforce planning and reduce duplication, while retaining sector-specific expertise.

Over the past year, the ECITB and CITB have already expanded cooperation across infrastructure planning, trainer and assessor recruitment, clean energy job pathways and skills passporting initiatives designed to improve labour mobility between projects and sectors.

The engineering construction industry, in particular, faces mounting demand as the UK scales up offshore wind, carbon capture and storage, hydrogen production and nuclear capacity — all sectors requiring highly specialised technical skills and safety standards.

The consultation is likely to attract close scrutiny from employers, trade unions and training providers concerned about ensuring that any merger preserves industry focus while delivering efficiency gains.

Ministers have said that no final decision will be taken until the consultation responses are fully analysed.

The outcome could reshape how workforce development is structured across two of the UK’s most strategically important sectors at a time when labour shortages remain one of the biggest constraints on growth.

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Government to consult on ECITB and CITB merger into single construction skills body

Rachel Reeves delivered her 2026 Spring Statement against the backdrop of escalating conflict in the Middle East and mounting fears that higher energy prices could derail the fragile recovery taking hold in the UK economy.

Speaking in the House of Commons, the Chancellor of the Exchequer emphasised stability in what she described as “an increasingly uncertain world”, arguing that falling inflation and earlier interest rate cuts were beginning to ease the cost-of-living squeeze on households.

In keeping with her pledge to hold only one major fiscal event each year, the autumn Budget, Reeves announced no new tax rises or spending measures. Instead, the statement focused on updated forecasts from the Office for Budget Responsibility (OBR) and on defending the government’s economic strategy.

Yet the economic backdrop has shifted sharply in recent days. Rising oil and gas prices, following military escalation in the Gulf region, have reignited concerns about inflation just as markets had been pricing in further base rate cuts from the Bank of England.

Growth downgraded for 2026

The OBR has revised down its growth forecast for 2026, with GDP now expected to expand by 1.1 per cent this year, compared with 1.4 per cent projected at the November Budget.

While the downgrade reflects weaker short-term momentum and softer global demand, the medium-term outlook has been nudged slightly higher. Growth is forecast at 1.6 per cent in both 2027 and 2028, up from 1.5 per cent previously, before easing to 1.5 per cent in 2029 and 2030.

Reeves sought to frame the revision as a short-term recalibration rather than a structural weakness, stressing that inflation had fallen to 3 per cent and was on course to decline further.

However, business groups warned that the recovery remains delicate. The Zoho Digital Health Study 2026 found that 21 per cent of UK business leaders cited high inflation and rising costs as their biggest external challenge, with half reporting an increase in cost per employee over the past year.

Unemployment to rise before easing

The labour market is also expected to soften. Unemployment is forecast to peak at 5.3 per cent later this year before gradually falling to 4.1 per cent by the end of the parliament, slightly below current levels.

While the government highlighted resilience in wage growth, business representatives cautioned that rising employment costs, including higher National Insurance contributions and the forthcoming 4.1 per cent increase in the National Living Wage — are weighing heavily on hiring decisions.

Borrowing and fiscal headroom

One brighter spot in the forecast is public borrowing. The OBR expects borrowing to fall by almost £18 billion compared with the autumn forecast.

Public sector net borrowing is projected to decline from 4.3 per cent of GDP this year to 3.6 per cent next year, then 2.9 per cent in 2028, 2.5 per cent in 2029 and 1.8 per cent in 2030.

Reeves’ fiscal “headroom”, the buffer against her self-imposed fiscal rules, has risen from £21.7 billion in November to £23.6 billion. The Chancellor presented this as evidence of disciplined economic management designed to reassure bond markets.

Yet the headroom remains vulnerable to external shocks. A sustained rise in wholesale gas prices could significantly alter inflation projections, potentially delaying further interest rate reductions.

Energy and North Sea focus

In recognition of the geopolitical risk, Reeves confirmed she would meet North Sea energy industry leaders to discuss the implications of the Middle East conflict.

Energy markets have already reacted sharply. Brent crude has climbed towards $80 per barrel, while liquefied natural gas prices have surged, raising the spectre of renewed cost pressures for households and energy-intensive sectors.

Analysts warn that a prolonged disruption could undermine the inflation trajectory that underpins current rate-cut expectations.

Business reaction: calls for action over rhetoric

The Night Time Industries Association (NTIA) criticised the statement as disconnected from on-the-ground realities. Chief executive Michael Kill said that while the government spoke of stability, businesses faced compounding pressures from energy costs, business rates and reduced consumer spending.

“For energy-intensive sectors like hospitality and the night-time economy, this is not abstract economics, it is an immediate and compounding threat,” he said, calling for a VAT cut for hospitality to stimulate demand.

Similarly, tech leaders urged more practical support for small firms adopting AI and digital tools. Matt Rouif, CEO of Photoroom, welcomed the pro-entrepreneur tone but said concrete measures were needed to expand access to AI and digital skills at scale.

Meanwhile, Uber Boat by Thames Clippers criticised the absence of measures to accelerate river transport electrification, describing it as a missed opportunity for environmental progress at minimal fiscal cost.

A cautious tone in volatile times

Overall, the Spring Statement was deliberately restrained. Reeves avoided policy fireworks, focusing instead on maintaining fiscal credibility and signalling continuity.

However, the external environment is anything but stable. Rising energy prices, geopolitical tensions and volatile bond markets mean the economic outlook could shift rapidly in the coming months.

While the Chancellor framed the statement around stability and improving fundamentals, business leaders remain wary. Growth has been trimmed, unemployment is set to rise before falling, and inflation risks have re-emerged just as confidence was tentatively rebuilding.

As Reeves herself acknowledged, the UK economy is navigating an increasingly uncertain world. The question now is whether caution alone will be enough to steer it through the turbulence ahead.

Read more:
Spring Statement 2026: Rachel Reeves trims growth forecast as Middle East tensions cloud outlook

Household energy bills could climb to as much as £2,500 a year if the escalating conflict involving Iran leads to prolonged disruption in global gas supplies, analysts have warned, raising the prospect of a renewed energy crisis.

Wholesale gas prices in Britain have already surged by up to 50 per cent amid mounting fears of supply shortages, after QatarEnergy halted liquefied natural gas (LNG) production following military attacks on key facilities at Ras Laffan and Mesaieed. The move has intensified concerns over the stability of supplies passing through the Strait of Hormuz, a vital global energy chokepoint.

Britain’s benchmark gas price, NBP, leapt by 54 per cent to 122p per therm on Monday, mirroring similar spikes across continental Europe. The UK and European markets are closely linked through pipeline infrastructure, meaning price shocks are rapidly transmitted across both regions.

Analysts warn that if disruption to LNG exports from Qatar and the United Arab Emirates persists, wholesale gas prices in Europe could triple. Together, the two countries account for roughly a fifth of global LNG supply. Qatar alone is the world’s second-largest LNG exporter after the United States.

Chris Wheaton, an analyst at Stifel, said that a prolonged closure of the Strait of Hormuz could push European gas prices back towards the levels seen during the 2022 energy crisis triggered by Russia’s invasion of Ukraine.

“If LNG production from Qatar and the UAE was disrupted, we see a repeat of 2022,” he said. “European gas prices would need to rise sharply to attract LNG cargoes away from Asia and into Europe.”

Wheaton suggested that UK wholesale gas prices could reach 250p per therm in such a scenario. At that level, the energy price cap set by Ofgem could rise to approximately £2,500 per year for a typical dual-fuel household, up from the current £1,641.

The strait is a critical maritime route through which a substantial share of the world’s oil and LNG flows. Shipping traffic has slowed dramatically after Iran reportedly targeted tankers in retaliation for US and Israeli strikes that killed Ayatollah Ali Khamenei, Iran’s supreme leader. Brent crude oil has also climbed, rising around 9 per cent to $79.40 per barrel.

Although much of Qatar’s LNG is destined for Asian markets such as China and India, any disruption would intensify global competition for alternative cargoes, driving prices higher for European buyers.

Tom Marzec-Manser, director for European gas and LNG at Wood Mackenzie, said traders were closely monitoring how long the disruption might last.

“The prospect of around 20 per cent of the world’s LNG being cut off from the market has unsurprisingly led to a sharp rise in prices,” he said. “The longer the Strait remains effectively closed, the greater the upward pressure on gas prices.”

Europe currently relies on LNG for around a quarter of its gas supply. Storage levels are lower than usual following a colder winter, leaving the region more exposed to supply shocks.

Any sustained increase in wholesale prices would eventually filter through to consumers via the energy price cap. While the April to June cap is already fixed, the July to September level is calculated using an average of wholesale prices over the preceding months.

Dr Craig Lowrey, principal consultant at Cornwall Insight, said the immediate impact on bills would be limited but warned that prolonged volatility would have consequences.

“For customers on the default tariff cap, there should be no immediate impact on bills,” he said. “However, the long-term effect depends on how long wholesale prices remain elevated. The UK remains highly exposed to global gas markets.”

The government recently announced that average energy bills would fall by £117 from April, offering some relief to households after years of high costs. Analysts caution that those savings could be wiped out if wholesale prices continue to climb.

The Bank of England is also watching developments closely. A sustained spike in energy prices would risk reigniting inflationary pressures, potentially delaying expected interest rate cuts and placing further strain on household finances.

With geopolitical tensions high and energy markets tightly balanced, analysts say the next few weeks will be critical in determining whether current price spikes prove temporary or mark the start of another prolonged period of elevated bills.

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Energy bills could hit £2,500 if Iran conflict disrupts global gas supplies

Shop price inflation slowed more than expected in February, offering tentative relief to households grappling with elevated living costs and providing fresh evidence that broader inflationary pressures may be easing.

New data from the British Retail Consortium (BRC) and market research firm NielsenIQ showed that shop prices rose by 1.1 per cent year-on-year in February, down from 1.5 per cent in January. The deceleration was driven by increased discounting across fashion, health and beauty categories, alongside moderating food price inflation.

The figures land just days before the government’s spring statement, when the Office for Budget Responsibility will update its economic forecasts and assess the outlook for growth and public finances.

The latest retail data adds to signs that price pressures are cooling. Official statistics from the Office for National Statistics showed consumer price inflation fell sharply to 3 per cent in January, moving closer to the Bank of England’s 2 per cent target. That decline was partly attributed to lower food price growth, particularly in staples such as bread, cereals and meat.

Food price inflation remained elevated in February at 3.5 per cent, but that represented a slowdown from 3.9 per cent in January. Fresh food inflation eased slightly, while ambient food inflation, covering items stored at room temperature such as canned goods, coffee and packaged foods, slowed markedly to 2.3 per cent from 3.1 per cent. The BRC said ambient inflation is now at its lowest level in four years, reflecting lower global commodity costs and intense competition among supermarkets.

Non-food prices, including clothing, electronics and household goods, fell by 0.1 per cent year-on-year in February, compared with growth of 0.3 per cent in January. Retailers have leaned heavily on promotions to stimulate demand amid fragile consumer confidence and unpredictable spending patterns.

Helen Dickinson, chief executive of the BRC, described the slowdown as a “welcome relief” but cautioned that prices are still rising overall and many households remain under strain. She warned that cost pressures facing retailers, including wage increases and regulatory changes, could reverse some of the recent progress.

Retailers are closely monitoring the potential impact of the Employment Rights Act, which is expected to increase labour costs. Industry leaders argue that if secondary legislation adds complexity or cost burdens, those expenses may ultimately be passed on to consumers.

Mike Watkins, head of retailer and business insight at NielsenIQ, said competitive pricing has intensified across both food and non-food sectors since the start of the year. “While weak sentiment and difficult trading conditions are making demand unpredictable, shoppers are beginning to see some easing in cost-of-living pressures,” he said.

The retail inflation slowdown comes against a mixed economic backdrop. While recent data has pointed to stronger-than-expected retail sales and a record monthly budget surplus of £30.4 billion, unemployment has climbed to a five-year high and economic growth remains subdued.

For policymakers, the moderation in shop price inflation will be closely scrutinised as they weigh interest rate decisions and fiscal policy. For households, however, the immediate takeaway is more modest: some pressure may be easing, but the cost of living challenge is far from resolved.

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UK shop price inflation slows to 1.1% in February, easing cost of living pressure

Teenage entrepreneurs swapped classrooms for committee rooms this week as groups of 16 and 17-year-olds pitched their start-ups inside the House of Commons, offering ministers a vivid reminder of the ambition bubbling beneath Britain’s youth unemployment statistics.

The Year 12 students, brought to Parliament by the charity Young Enterprise, presented business plans refined through the organisation’s flagship company programme, which challenges secondary school pupils to create and run real trading ventures.

Addressing the students, Blair McDougall described the energy in the room as “intoxicating”.

“The best thing about my job is sitting down with people who have thought of a job, a product, a new industry that you didn’t even know was a thing,” he said. “That way of looking at the world is exhilarating.”

Four teams from three London schools competed for the prize of a tour of 10 Downing Street, showcasing ideas that ranged from sustainable toys to personalised gifts.

Biodegradable desk pets win top prize

The winning team, from Bishopshalt School in Uxbridge, impressed judges with GoFigr, a range of marine-themed desk pets and fidget toys made from biodegradable plastic.

The four boys manufactured 73 units, selling 70 at London’s Portobello market. With a production cost of £1.50 per toy and a retail price of £5, the team generated £100 profit from their initial sales, later boosting total profits by a further £250 through a school pop-up event.

Gurkaram Rai Singh, 16, who acted as chief executive, delivered the pitch with confidence, even drawing laughter from Tim Campbell, the first winner of The Apprentice.

Reflecting on the market experience, Gurkaram said the programme had sharpened skills he did not realise he already possessed.

“Young Enterprise really utilises skills that you already have,” he said. “It gives you certain new skills, but it refines the old ones.”

Initially hesitant when selling at Portobello, he adapted quickly. “I realised there were Italian customers and I’m comfortable speaking Italian. Once I started speaking in Italian, more people came over. It was beautiful, everyone has a different story and reason for buying.”

The team now hopes to expand into keyrings and other accessories.

Another Bishopshalt group presented Alaesa Luxuries, producing jewellery from bismuth crystals, emphasising that each piece is unique and sustainably created. After modest early profits of £25 at market and £60 at school, the team is refining its pricing strategy.

Students from Royal Greenwich Trust School pitched two concepts: Made with a Smile, which manufactures phone charms and key chains at a production cost of just 20p per unit, sold for £3; and Muggle, a personalised mug business that pivoted from its original concept after early challenges. Judges praised their willingness to adapt, a skill many seasoned founders struggle to master.

Meanwhile, Plumstead Manor School’s Standly showcased a bamboo-based phone stand produced via a UK supplier. The team has already raised more than £500 and is moving into production.

Among those observing was Murvah Iqbal, co-founder of courier start-up Hived, who herself took part in Young Enterprise while at school.

“It was formative just having that taste of entrepreneurship really early on,” she said. “It gives you permission to think differently about your future.”

The parliamentary showcase formed part of a broader government initiative, working with Young Enterprise and the Department for Business and Trade, to promote enterprise education as outlined in the small business plan released in 2025.

Earlier in the day, McDougall chaired a roundtable with young founders, who raised practical barriers that still hamper teenage entrepreneurship, from difficulties opening business bank accounts under 18, to limited access to tailored mentoring and funding. Some suggested the government develop an AI-powered advisory tool to guide first-time founders through regulation, tax and compliance requirements.

Lessons for policymakers

The event came against a backdrop of rising youth unemployment and mounting concern that Britain’s next generation lacks visible entrepreneurial role models. Yet inside Westminster, the atmosphere was notably optimistic.

The students’ ideas may have been modest in scale, but their commercial instincts, pricing discipline, supply chain thinking and customer targeting, reflected a level of sophistication that would not look out of place in a small-cap boardroom.

For ministers seeking to drive growth, the message was clear: the entrepreneurial impulse exists. The challenge is ensuring the system does not stifle it before it has the chance to scale.

Read more:
‘Exhilarating’ teenage entrepreneurs take their ideas to Westminster

Consumer confidence in the UK slipped to its lowest level since November as households grew more pessimistic about their personal finances and the wider economy, according to the latest survey from GfK.

An index of household sentiment compiled by GfK fell by three points to minus 19 in February, down from minus 16 in January and below analysts’ expectations of minus 15. It marks the weakest reading since the immediate aftermath of the autumn budget and underscores lingering fragility in consumer sentiment.

The survey, which questioned 2,000 Britons aged 16 and over, showed a notable deterioration in perceptions of personal finances. Households reported that they were less inclined to make major purchases and expected to save less of their monthly income. The forward-looking savings index dropped sharply by seven points to 21, reflecting growing uncertainty about income prospects and interest rate trends.

Although inflation has begun to ease, the psychological effects of the past two years of rising prices continue to weigh on consumers. After the survey was completed, data from the Office for National Statistics showed inflation falling to 3 per cent in January from 3.4 per cent in December. While this decline may have offered some reassurance, it came too late to influence February’s confidence reading.

Neil Bellamy, consumer insights director at GfK, said that even as price pressures moderate, households remain cautious. “Although the rate of inflation is easing, prices continue to rise, forcing many households to prioritise day-to-day spending over longer-term needs,” he said. “Views on the broader economy remain firmly in negative territory, with consumers anticipating only limited economic growth this year.”

The decline in confidence also came before the ONS reported that unemployment had climbed to a post-pandemic high, with youth joblessness reaching its highest level in 11 years, developments likely to reinforce caution among working-age households.

There are, however, countervailing signals. Energy regulator Ofgem recently announced that the average household energy bill will fall by £117 from April, which could provide some relief in the spring. Financial markets are also increasingly confident that the Bank of England will cut interest rates further this year, potentially easing borrowing costs for households.

Despite February’s dip, consumer confidence remains far above its record low of minus 49, reached in September 2022 in the aftermath of the Truss government’s mini budget.

Business sentiment, meanwhile, appears more upbeat. Separate data from Lloyds Bank showed optimism among firms rising by eight points to 36 per cent in February. The survey of 1,200 businesses suggested that expectations of lower interest rates and easing cost pressures may be supporting corporate confidence.

Recent economic indicators have also hinted at improved momentum. Retail sales jumped by 1.8 per cent in January, the composite purchasing managers’ index climbed to a 22-month high, and government borrowing costs have retreated from recent peaks. The FTSE 100 has continued to notch record highs, buoyed by global investor flows and resilient corporate earnings.

Attention now turns to the forthcoming economic forecasts from the Office for Budget Responsibility, due to be published alongside Rachel Reeves’s spring statement. While no major tax or spending changes are expected, the outlook for growth, inflation and public finances will shape expectations for the months ahead.

For now, however, the divergence between improving macro indicators and fragile household sentiment highlights a familiar feature of the post-pandemic recovery: economic stabilisation has yet to translate fully into renewed consumer confidence.

Read more:
Public fears over finances push UK consumer confidence back down

More than half of young Britons are unable to name a single entrepreneur, according to new research that campaigners say underlines a worrying disconnect between the UK’s business community and the next generation of workers.

A YouGov survey conducted for Enterprise Britain found that 56 per cent of 18 to 25-year-olds could not name an entrepreneur, founder or chief executive when asked. Among those who could, Richard Branson remained the most recognised figure, cited by 16 per cent of young respondents, despite being 75 and having founded the Virgin Group more than five decades ago.

Lord Sugar, best known for hosting The Apprentice, was named by 6 per cent, while just 2 per cent mentioned Steven Bartlett, the Dragons’ Den investor and host of The Diary of a CEO. Other high-profile younger founders, including Grace Beverley, barely registered.

Across all age groups, Branson remained the most cited entrepreneur, named by 33 per cent of respondents. Yet 32 per cent of UK adults were also unable to name a single business founder or chief executive. At the same time, 74 per cent of those surveyed believed Britain’s position in the global economy was in decline.

The findings have prompted Enterprise Britain, a lobby group of business founders, to launch a campaign called Time to Act, urging ministers to do more to champion entrepreneurship at a time when youth unemployment is at its highest level in more than a decade and the Treasury is reviewing how entrepreneurs are taxed.

Martha Lane Fox, a member of Enterprise Britain and co-founder of Lastminute.com, said the problem may lie partly in the way entrepreneurship is framed.

“I can only assume it’s because this word has taken on a grandeur,” she said. “People think, ‘I don’t know anyone like that because an entrepreneur is someone who builds a big global company.’ You may have the view that you have to be like Jeff Bezos. Well, I don’t want to be like Jeff Bezos, thank you very much.”

Lane Fox argued that entrepreneurship comes in many forms, from small local businesses to high-growth technology ventures, and should be seen as a realistic and attainable path. “It can come in many forms and can be economically rewarding for you, your community and wider society,” she said.

Enterprise Britain’s co-chairs, Stephen Fitzpatrick, founder of Ovo Energy, and Brent Hoberman, co-founder of Lastminute.com and founder of Founders Forum, are calling for the creation of a dedicated minister for entrepreneurship to act as a champion for high-growth businesses within government.

The campaign also advocates what it describes as the “democratisation of capital” through a “nation of shareholders”, including expanding employee share ownership schemes and encouraging pension funds to allocate more capital to UK growth companies.

Fitzpatrick said Britain risked undermining its own entrepreneurial potential. “Britain has a great economic engine,” he said. “But while we have one foot on the accelerator, the other one is on the brake. It’s always hard to grow a business, but in the UK we’re making it exceptionally tough. We’ve got to take the brakes off so our most ambitious businesses can drive our country forward.”

The survey’s findings suggest that unless younger Britons see entrepreneurship as relatable and achievable. rather than the preserve of celebrity billionaires, efforts to boost start-ups and scale-ups may struggle to gain traction with the very generation policymakers hope will power the next phase of economic growth.

Read more:
Most young Britons cannot name a single entrepreneur

More than three in four small business owners in London are losing sleep over the pressures of running a company in today’s climate, according to new research from Novuna Business Finance.

The latest findings show that 79% of small business owners in the capital say worries about day-to-day business issues keep them awake at night, with economic volatility and geopolitical uncertainty emerging as the biggest concern. Half of respondents (50%) cited market instability as their primary source of anxiety.

The data suggests that while many London firms remain ambitious, the strain of operating in a fragile economic environment is taking a tangible toll on entrepreneurs.

Beyond macroeconomic instability, 37% of London business owners said they were worried about further tax increases and interest rate hikes. Concerns over tax have intensified since the rise in employer National Insurance contributions that took effect last April, adding to operating costs for thousands of firms.

Cashflow pressures also remain front of mind. Almost a quarter (23%) of respondents said managing cashflow keeps them awake at night, while 20% pointed to business rates as a major worry.

Customer retention is another key stress factor, with 31% reporting broken sleep over concerns about holding on to existing clients in a competitive and uncertain marketplace.

The findings come just one month after Novuna reported a six-month high in London small business growth expectations. Around 40% of London firms predicted growth for the first quarter of 2026, significantly above the national average of 27%.

However, the research indicates that ambition and stress often go hand in hand. Businesses forecasting significant expansion were the most likely to report sleepless nights. Among those predicting strong growth, 85% said business worries were affecting their sleep, up from 75% two years ago.

By contrast, 73% of business owners not forecasting growth reported similar stress, suggesting that while pressures are widespread, high-growth environments can intensify anxiety.

Workforce challenges are also weighing on business leaders. Seventeen per cent said employee shortages were a key concern, while 11% worried specifically about recruitment difficulties in securing skilled staff.

Meanwhile, despite renewed discussions around an EU reset and closer ties with Brussels, nearly one in five (19%) London business owners said the long-term impact of Brexit continues to affect their business and still keeps them awake at night.

“Sleepless nights are not confined to struggling businesses”

Joanna Morris, Head of Insight at Novuna Business Finance, said the data highlights the human cost behind headline growth figures.

“At the start of 2026 we saw a rise in London small business growth outlook. That said, our latest data suggests that this comes at a human cost for many business owners, many of whom take their business worries home with them and struggle to switch off,” she said.

“When business owners are kept awake at night working through enterprise issues, we gain a sense of the intensity of some of these concerns for entrepreneurs. Our research suggests that sleepless nights are not just confined to businesses that are struggling to grow. Managing fast-paced or significant growth can also be stressful for established businesses.”

The findings are based on the latest Business Barometer study from Novuna Business Finance, which surveyed 1,000 small business owners across the UK to identify the issues they consider serious enough to lose sleep over.

While London’s small business community continues to show resilience and ambition, the data underscores the emotional and operational pressures that accompany entrepreneurship in a period marked by inflation, policy uncertainty and global instability.

Read more:
Economic volatility keeps majority of London’s small business owners awake at night

Around one million taxpayers who missed the 31 January self-assessment deadline now face an additional financial hit unless they settle what they owe to HMRC by 3 March.

According to leading audit, tax and business advisory firm Blick Rothenberg, anyone who has not paid their 2024/25 tax liability by that date will be subject to a 5% surcharge on outstanding amounts, in addition to late payment interest that has already begun to accrue.

Robert Salter, a director at Blick Rothenberg, said the clock is already ticking. “The one million taxpayers HMRC estimates missed the 31 January deadline to settle their 2024/25 UK tax liabilities must pay up by 3 March 2026 or face a 5% surcharge on any underpaid taxes plus late payment interest,” he said.

Late payment interest began accruing from 1 February 2026 at an annualised rate of 7.75%, meaning the longer the delay, the higher the total bill.

Salter illustrated the potential cost with a typical example. A taxpayer with a £2,000 self-assessment liability who pays on 1 April 2026 would incur an additional charge of around £125 on top of the original tax owed. That figure would continue to rise the longer the debt remains outstanding, as further 5% surcharges can be applied if the tax is still unpaid six and twelve months after the original deadline.

The surcharge regime has been a central feature of the UK’s self-assessment system for nearly three decades. “Most people would agree that it is appropriate for taxpayers who haven’t settled their liabilities to be subject to extra costs,” Salter noted.

However, he cautioned that economic pressures are making compliance more difficult for many. Frozen tax thresholds and fiscal drag have increased the effective tax burden in recent years, pulling more individuals into higher bands. At the same time, households continue to feel the impact of the cost-of-living crisis.

“Many taxpayers could be struggling to settle their liabilities on a timely basis,” Salter said.

While it is difficult to forecast the exact revenue HMRC may collect from late payment penalties this year, official statistics show that the tax authority has previously received more than £300 million in self-assessment-related penalties in a single year.

There are also concerns that the penalty total could rise further. A significant number of taxpayers have yet to submit their 2024/25 tax returns, while others who have filed may still not have paid the tax due.

“With the sharp increase in effective tax rates in recent years, HMRC’s penalty ‘record’ could be exceeded in the coming months,” Salter warned.

Taxpayers who are unable to pay in full are encouraged to contact HMRC as soon as possible to discuss a Time to Pay arrangement, which may help mitigate additional penalties, though interest will generally continue to accrue until the balance is cleared.

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Taxpayers warned to pay HMRC by 3 March or face 5% surcharge

More than 860,000 self-employed people and landlords will have to start filing regular digital tax updates with HMRC from April as the government’s long-planned Making Tax Digital (MTD) programme enters its next phase.

From 6 April 2026, sole traders and landlords earning more than £50,000 a year from self-employment and property income will be required to keep digital records and submit quarterly updates to HMRC using compatible software. The reform represents one of the biggest changes to the self-assessment system in decades.

The government says the overhaul will modernise tax administration, reduce errors and help taxpayers keep better track of what they owe. Critics, however, argue it risks piling further administrative pressure on small business owners already grappling with rising costs and tighter margins.

What is Making Tax Digital?

Making Tax Digital is a government initiative designed to move the UK tax system away from annual paper-based self-assessment returns towards digital record-keeping and more frequent reporting.

Under the new rules, affected taxpayers must:
• Keep digital records of income and expenses.
• Submit four quarterly updates to HMRC.
• Submit an end-of-year final declaration to confirm their overall tax position.

For a sole trader, this means at least five submissions per year — four quarterly updates and one final year-end return.

For individuals who are both self-employed and landlords, the reporting burden increases further. Separate updates are required for each income stream, meaning some taxpayers could face more than 10 submissions annually, particularly if VAT reporting is also required.

The rollout is being phased in by income level. From April 2026, the £50,000 threshold applies. From April 2027, the threshold falls to £30,000, affecting an estimated further 970,000 people. By 2028, those earning more than £20,000 will also be required to comply, potentially bringing millions more into the system.

Key deadlines for those starting in April 2026

For taxpayers entering the system next April, the first compliance cycle will include:
• 6 April 2026 – begin keeping digital records under MTD
• 7 August 2026 – first quarterly update due
• 7 November 2026 – second quarterly update due
• 31 January 2027 – traditional self-assessment return for 2025/26 still required
• 7 February 2027 – third quarterly update
• 7 May 2027 – fourth quarterly update
• 31 January 2028 – first full MTD annual declaration deadline

HMRC says free software options will be available, and that digital tools will generate summary reports to submit directly to the tax authority.

The penalty system has also been redesigned. Rather than issuing immediate fines for late submissions, HMRC will operate a points-based system. A £200 fine will only be triggered once four penalty points have been accumulated, allowing for occasional missed deadlines without instant financial consequences.

While ministers argue the system will ultimately reduce errors and smooth out tax administration, many small business representatives fear it will increase compliance costs.

Taryn Lee Johnston, owner of publishing firm The FCM Group, said quarterly reporting adds further strain to already stretched entrepreneurs.

“Quarterly reporting under Making Tax Digital was sold as a way to modernise the system. The concern is not just frequency, but cost, time and mental bandwidth,” she said.

“Many small business owners do not have in-house finance teams. They will either need to pay accountants more or spend more hours on compliance rather than growing their businesses.”

She added that at a time when the government is seeking to boost entrepreneurship and economic growth, increasing reporting requirements may send “a conflicting message”.

Others in the sector warn that preparation will be critical. Gwion Thomas, founder of accounting app LITT, said affected taxpayers should not underestimate the shift.

“While HMRC’s goal of improving accuracy is positive, the priority now is preparation,” he said. “Don’t leave it to a last-minute scramble and understand what you need well ahead of April’s rollout.”

Some technology providers argue the new system could help business owners manage cash flow more effectively.

Research from enterprise software company Sage suggests that almost a quarter of UK business owners spend more than six hours completing their annual tax return. Lisa Ewens, senior vice president for small business at Sage, said spreading tax reporting across the year could reduce pressure.

“Digital tax tools can help spread the workload, reduce last-minute stress and give business owners back valuable time,” she said. “They also provide a clearer picture of what’s owed throughout the year, so owners can plan and budget with more confidence.”

The bigger concern for some is not just the April changes but the expanding scope of the regime. As income thresholds fall over the next two years, hundreds of thousands more sole traders and landlords will be brought into quarterly reporting.

With youth self-employment rising and many individuals operating side hustles alongside salaried work, the number of people affected could continue to grow.

For now, those earning above £50,000 from self-employment or property income have just over a month to ensure they are ready for digital record-keeping and quarterly updates.

Whether Making Tax Digital becomes a genuine productivity boost or another layer of administrative burden will likely depend on how seamlessly small businesses adapt — and how effectively the new system performs once fully in operation.

Read more:
More than 860,000 to move to Making Tax Digital from April as quarterly reporting begins

Sole traders are spending the equivalent of more than three working days each year dealing with tax administration, as the rollout of Making Tax Digital (MTD) for Income Tax approaches.

Research from Monzo Business found that sole traders devote an average of 27 hours annually to tax-related admin — around two hours a month for more than half of those surveyed. Based on the 2026 minimum wage, that time equates to approximately £343 in lost productivity.

The findings come just weeks before HMRC’s MTD for Income Tax rules take effect, requiring sole traders and landlords to submit quarterly digital updates of income and expenses using approved software.

While 70 per cent of those surveyed said they were aware of the upcoming changes, 28 per cent admitted they were not confident their business would be ready. Nearly seven in ten currently do not pay for digital tools to manage their tax affairs.

More than half of respondents said handling business taxes and accounting causes stress, and 44 per cent admitted submitting a tax return late because the process felt too confusing or time-consuming.

The changes form part of HMRC’s wider Making Tax Digital programme, which aims to modernise the UK tax system and reduce errors through digital record-keeping and submissions.

Monzo Business, which serves more than 800,000 business customers, is launching a free built-in tax tool powered by Sage’s embedded accounting technology. The bank says the tool will allow users to categorise transactions, track income and expenses in real time and prepare for quarterly submissions without relying on spreadsheets.

Jordan Shwide, general manager at Monzo Business, said: “With Making Tax Digital coming soon, we want sole traders to feel supported, not overwhelmed. By building a simple tax tool directly into everyday business banking, we’re helping reduce admin and stress.”

The research highlights the time constraints faced by the UK’s smallest businesses. Nearly nine in ten sole traders said they take regular tea or coffee breaks during the day, yet the 27 hours spent on tax administration equate to around 138 missed hot drink breaks annually.

As the new tax year approaches, accountants and business groups have urged sole traders to review their systems and ensure they are compliant with digital reporting requirements.

For many, the success of Making Tax Digital will depend not only on awareness but on whether accessible tools can reduce administrative burden rather than add to it.

Read more:
Sole traders spend 27 hours a year on tax admin ahead of Making Tax Digital changes

The mental health impact of late payments is finally being acknowledged, with new guidance launched to help freelancers and small business owners cope when cashflow uncertainty starts to bite.

Published to coincide with Time to Talk Day, new online guidance from the Office of the Small Business Commissioner (OSBC) brings together mental health support and practical advice for SMEs and freelancers dealing with late or unpaid invoices.

Late payment is usually treated as a balance-sheet issue. In reality, for sole traders and one-person businesses, it’s deeply personal. When you are the business, delayed invoices don’t just affect forecasts, they affect rent, food shopping, sleep, and mental health.

The guidance signposts business owners to trusted mental health services while also outlining steps they can take to chase overdue invoices and escalate payment disputes. It has been developed alongside research from Leapers, which explored the link between financial stress and mental wellbeing among freelancers and small business owners.

Emma Jones, Small Business Commissioner (pictured), said it was essential that freelancers feel able to reach out for support, particularly when payment delays place pressure on their finances and wellbeing.

“Running a business can be tough at times and it is important that freelancers know about, and feel they can reach out to, the help and support available,” she said, adding that peer networks and shared experience can make a “profound and positive impact”.

But while the guidance is welcome, critics argue it only addresses the symptoms,  not the cause.

Stephen Carter, Director of Payment Strategy at Ivalua, said the government is still avoiding the harder conversation.

“UK SMEs don’t just need mental health support to cope with late payments. They need legislation and enforcement to stop delays in the first place,” he said. “Late payment isn’t accidental, it’s the result of poor governance, outdated systems and a lack of accountability from those holding the cash.”

Carter warned that late payment continues to ripple through supply chains, damaging trust and, in some cases, forcing small suppliers out of business entirely. Research cited by Ivalua suggests more than a third of UK businesses have seen suppliers fail due to cost pressures linked to delayed payments.

He called on the government to urgently publish its long-awaited response to last year’s late payment consultation, warning that every month of delay effectively tells large organisations that dragging their feet comes with no real consequences.

Read more:
New guidance set to tackle the mental health toll of late payments

NatWest has announced plans to grow its Accelerator community to 50,000 UK entrepreneurs in 2026, a five-fold increase on its original ambition for 2025, as demand for practical, non-financial support among founders continues to rise.

The move follows a breakout year for the programme. In 2025, NatWest supported around 12,000 entrepreneurs — more than it had backed in the previous ten years combined, underlining how sharply demand has grown for peer networks, mentoring and hands-on guidance as running a small business becomes more complex and more pressured.

For many founders, particularly sole traders and owner-managers, access to capital is only part of the challenge. Time, confidence, skills and isolation increasingly sit alongside cashflow as barriers to growth. NatWest says its expanded Accelerator community is designed to address those realities, bringing together local cohorts, expert mentors and founder-to-founder support rather than focusing solely on lending.

The expansion forms part of the bank’s wider Growing Together plan, which aims to support regional economies, mid-market businesses and the next generation of growth companies. NatWest has been clear that it sees its role as more than just a funder, positioning itself as a connector between founders, universities, investors and policymakers.

Data shared by the bank suggests the model is working. Businesses that completed the Accelerator programme grew turnover by an average of 104% year-on-year, compared with 20% growth among similar businesses outside the programme. Crucially, nine in ten Accelerator businesses were still trading three years later, a stark contrast to the wider small business survival rate.

Robert Begbie, CEO of Commercial & Institutional Banking at NatWest Group, said the ambition reflects a belief that founders need backing at every stage, not just at the point of borrowing.

“Entrepreneurs are the driving force behind innovation, jobs and long-term growth,” he said. “By scaling the Accelerator, we’re reinforcing our commitment to help founders turn ambition into sustainable businesses.”

The programme’s growth has been welcomed by business groups and government, but its appeal is particularly clear among founders who don’t fit the venture-capital mould. Through its hubs and university partnerships, including collaborations with Manchester, Oxford, York, Brighton and Warwick, NatWest offers free co-working space, one-to-one coaching, workshops and access to networks that many small business owners would otherwise struggle to afford.

The Accelerator also operates digitally through the NatWest Accelerator app, giving founders access to tools, training and peer support regardless of location. Pitch events and forums provide opportunities to raise visibility, test ideas and connect with funders without the pressure of a traditional funding round.

Leeds-based production company Mood Films joined the Accelerator after launching in 2024, having moved from creative collaboration into business ownership with little formal experience. Through the programme, the founders accessed coaching, workshops and peer support that helped them refine their offer and approach larger clients with confidence.

For many founders, that kind of support can be the difference between surviving and scaling — particularly in an environment where costs are rising, income is lumpy and late-paying clients remain a constant headache.

As NatWest pushes towards its 50,000-founder target, the expansion reflects a wider shift in how support for small businesses is evolving: less about glossy growth stories, more about giving real people the tools, confidence and networks to keep going.

Read more:
NatWest targets 50,000 founders as more small businesses look for support beyond funding

Electricians and welders are expected to remain the UK’s highest-earning trade roles in 2026, as demand for skilled workers continues to rise across construction, manufacturing, infrastructure and clean energy.

New research from Yorkshire-based steelwork manufacturing and coded welding specialist Tadweld shows that skilled trade careers are now matching – and in many cases exceeding – the earnings of traditional graduate professions, while offering strong job security and clear progression routes without the burden of university debt.

Drawing on data from the Office for National Statistics, Gov.uk, Indeed and Total Jobs, the analysis found that the average salary across the top 20 skilled trade roles now stands at £38,925. This places tradespeople broadly in line with the UK’s median full-time salary of £39,039, according to the latest ONS figures from April 2025.

The findings underline the continued strength of specialist roles such as electricians, welders, HVAC engineers, lift technicians and renewable-energy installers, where demand remains particularly strong as the UK accelerates housebuilding, upgrades infrastructure and pushes ahead with the transition to low-carbon energy systems.

According to the Construction Industry Training Board, the UK construction sector alone will require more than 250,000 additional workers by 2028 to meet projected demand. That requirement is increasingly being met by skilled trades rather than traditional professional roles, as employers prioritise hands-on technical expertise.

Chris Houston, Managing Director of Tadweld, said the research reflects a growing recognition that modern trades are highly technical, professional careers with long-term earning potential. He said electricians and welders in particular offer excellent pay, job security and the opportunity to work on nationally significant projects, from infrastructure upgrades to clean energy developments.

Houston said apprenticeships remain the backbone of the sector’s success, allowing people to earn while they learn and progress rapidly into skilled roles. However, he warned that rising training costs are beginning to place pressure on manufacturers and contractors, particularly small and medium-sized businesses.

The apprentice National Living Wage has increased by 66 per cent in just two years, rising from £6 an hour in 2023 to £10 an hour in 2025. Houston said this sharp rise has significantly increased the cost of training new entrants and risks limiting the number of apprenticeship opportunities available unless additional support is provided.

Despite strong interest in trade careers among young people and career-changers, apprenticeship starts remain well below historic levels. Department for Education data shows there were around 170,000 fewer apprenticeship starts in 2024 than a decade earlier, a trend that industry bodies have repeatedly warned could deepen skills shortages.

Groups including the Construction Industry Training Board, Make UK and the Federation of Small Businesses have consistently argued that sustained government support for apprenticeships is essential to maintaining wage growth, supporting regional economies and ensuring the UK has the skilled workforce needed to deliver housing, infrastructure and energy projects.

Tadweld’s outlook for 2026 concludes that skilled trades remain among the most resilient and attractive career paths in the UK, offering competitive pay aligned with national averages, strong demand across multiple sectors and clear progression without student debt. With the right investment in training and apprenticeships, the trade sector is well positioned to provide secure, well-paid careers while underpinning long-term economic growth.

Read more:
Electricians and welders set to be UK’s highest-earning trades in 2026, research finds

Most self-employed workers and freelancers in the UK are failing to put money aside for retirement, raising concerns about long-term financial security for a growing part of the workforce, according to new research.

A study by Aviva found that just 38 per cent of self-employed people and 40 per cent of freelancers are actively saving into a pension or retirement plan. Among digital nomads — workers who use technology to work remotely while living and travelling in different locations, the figure falls to just 34 per cent.

The findings suggest that the majority of people working outside traditional employment structures are not building dedicated retirement savings, potentially leaving themselves financially exposed later in life.

The research, based on a survey of 500 self-employed and freelance workers in the UK, also revealed widespread uncertainty about pension products. Fewer than one in four respondents said they understood the retirement savings options available to them, with only 24 per cent of self-employed workers and 22 per cent of freelancers aware of products such as self-invested personal pensions (SIPPs) or stakeholder pensions. Awareness among digital nomads was only marginally higher at 25 per cent.

While some respondents plan to take action, progress remains slow. Nearly a third of digital nomads said they intend to start saving for retirement soon, but 30 per cent admitted they are currently doing nothing to prepare. Among the wider self-employed and freelance community, 23 per cent and 18 per cent respectively said they plan to begin saving, yet around a third in each group are taking no specific steps at all.

Despite these gaps, flexible working continues to appeal strongly. More than four in five digital nomads said they plan to continue this way of working long-term, with almost half expecting to do so indefinitely. However, confidence about future finances is mixed: just over half of self-employed workers said they felt secure about their long-term financial position, compared with 50 per cent of freelancers.

Alistair McQueen, head of savings and retirement at Aviva, said the research highlighted a structural weakness in retirement planning for people outside PAYE employment.

“This research highlights a clear gap in retirement planning for people who are self-employed and freelance,” he said. “Without auto-enrolment or employer contributions to fall back on, many risk reaching later life without the savings they’ll need.”

McQueen added that even modest action could make a significant difference. “Small, regular steps, such as opening a personal pension and setting an affordable monthly contribution, can have a big impact over time. Flexible ways of working require flexible ways of saving, and taking action today can help build the financial security needed tomorrow.”

With self-employment, freelancing and remote working continuing to expand across the UK economy, Aviva warned that improving awareness and engagement around retirement saving will be critical to avoiding a future wave of financial insecurity among independent workers.

Read more:
Most self-employed and freelancers failing to save for retirement, Aviva finds

Taxpayers have just eight days left to file their self assessment tax return before the 31 January deadline, as HM Revenue & Customs warned that late submissions will trigger an automatic £100 penalty.

HMRC said more than 11.5 million people successfully filed by the deadline last year and is urging the estimated 3.3 million taxpayers who have yet to submit their return this year to act now to avoid fines and interest charges.

Those who have not started their return can access support through GOV.UK, including step-by-step guidance, webinars and YouTube videos. HMRC’s online services are available 24 hours a day, allowing customers to file at a time that suits them.

Once a return has been submitted, HMRC said the quickest and easiest way to pay any tax owed is via the free HMRC app, which takes less than a minute to use. Alternative payment options are also listed on GOV.UK.

Myrtle Lloyd, HMRC’s chief customer officer, urged taxpayers not to leave it until the last minute.

“Don’t leave it until deadline day,” she said. “Filing now will give you peace of mind that your tax return is completed and, if you have tax to pay, you have a week to arrange payment.

“If you’re worried about paying your tax bill, you may be able to set up a payment plan online – search ‘difficulties paying HMRC’ on GOV.UK.”

This year’s self assessment deadline falls on a Saturday. HMRC’s phone lines are open Monday to Friday, from 8am to 6pm, but will close on Friday 30 January and reopen on Monday 2 February, after the deadline has passed. Taxpayers who need to speak to an adviser are therefore being urged to call before Friday. On Saturday 31 January, HMRC will provide webchat support via its Online Services Helpdesk.

HMRC also set out the penalties for missing the deadline. Anyone who files late will face an initial £100 fixed penalty, even if there is no tax to pay or if the tax due is paid on time. After three months, daily penalties of £10 per day apply, up to a maximum of £900. Further penalties apply after six months and 12 months, amounting to either £300 or 5 per cent of the tax due, whichever is greater.

Additional penalties apply for paying tax late, charged at 5 per cent of the unpaid amount after 30 days, six months and 12 months, with interest added on top. HMRC said it will consider appeals from taxpayers who miss the deadline due to a reasonable excuse.

Looking ahead, HMRC also reminded taxpayers that major changes are on the way. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 will be required to use Making Tax Digital for Income Tax, submitting quarterly summaries of income and expenses.

HMRC is encouraging those affected to sign up early to familiarise themselves with the new system and prepare for the transition.

The tax authority also confirmed that customers do not need to include their 2025 Winter Fuel Payment, or Pension Age Winter Heating Payment in Scotland, on their 2024–25 tax return. Payments made in autumn 2025 will instead be accounted for in the 2025–26 return, due by 31 January 2027.

With the deadline fast approaching, HMRC is urging anyone who has yet to file to act now to avoid penalties and unnecessary stress.

Read more:
Eight days left to file self assessment as HMRC warns of automatic £100 penalty

HM Revenue & Customs is braced for a substantial surge in tax receipts this January as millions of taxpayers settle their self-assessment bills and employers begin paying out annual bonuses, according to tax advisers.

The boost, described as a “January tax boom”, is being driven by the fast-approaching self-assessment deadline on 31 January, alongside a broader year-on-year rise in overall tax revenues.

Robert Salter, a director at Blick Rothenberg, said there would be “no January blues” for the tax authority this year.

“Millions of taxpayers will need to pay their 2024–25 tax liabilities before the end-of-January deadline, significantly boosting January’s receipts,” he said. “This comes against the backdrop of a steady rise in the overall tax take year on year.”

Latest figures from HM Revenue & Customs show total tax revenues for the 12 months to December 2025 rose by more than 7 per cent compared with the previous year — an increase of over £60 billion.

Salter said the momentum is unlikely to fade quickly. “Employers typically pay taxable bonuses over the next two to three months, meaning HMRC can expect several more months of strong receipts as we approach the end of the tax year on 5 April 2026,” he said.

However, advisers cautioned that the surge in revenue is being driven less by underlying economic growth and more by recent tax policy changes. Salter pointed to direct tax rises introduced by the chancellor, Rachel Reeves, including the increase in employers’ national insurance contributions to 15 per cent.

He also highlighted the growing impact of fiscal drag — where frozen tax bands and thresholds pull more workers into higher tax brackets as wages rise with inflation.

“More and more taxpayers are paying higher rates of tax not because they are genuinely better off, but because thresholds remain frozen while wages increase,” Salter said.

As a result, he said, annual government tax receipts could soon exceed £1 trillion for the first time. Receipts for the year to December 2025 were around £910 billion and are expected to rise sharply over the final months of the tax year.

Despite the short-term boost to the public finances, Salter warned that higher inflation and rising joblessness, which he said were at least partly linked to higher employer taxes — could undermine the government’s longer-term economic ambitions.

“The risk is that these tax rises weaken employment and growth, leaving the Treasury under continued pressure from both a taxing and spending perspective,” he said.

While January’s figures are set to provide a welcome lift for HMRC, economists and advisers say the challenge for ministers will be turning today’s tax windfall into sustainable, long-term economic growth rather than relying on ever-higher receipts driven by fiscal drag and rising tax burdens.

Read more:
January tax windfall set to boost HMRC coffers amid self-assessment rush

The annual self-assessment deadline is once again taking a heavy emotional and financial toll on Britain’s self-employed workforce, with new research suggesting that tax stress is now making many question whether working for themselves is worth it at all.

Research from Taxfix, Europe’s AI-powered tax accounting platform, found that almost one in five self-employed people would rather pay a £100 fine than face the stress of filing their tax return on time. With the 31 January deadline approaching, 25 per cent of respondents admitted they plan to leave filing even later than usual this year.

The findings come as HMRC revealed that, as of 2 January, 5.65 million people – around 47 per cent of those required to complete a self-assessment – had yet to submit their return. Rather than apathy, Taxfix’s data points to complexity and anxiety as the main drivers of delay.

Among those still to file, complex forms, frequently changing tax rules and the stress associated with getting something wrong were cited as the biggest barriers to starting. More than half of respondents said poor customer service and a confusing HMRC website actively put them off beginning the process.

For many, the burden of self-assessment is starting to overshadow the benefits of self-employment. A third of self-assessors said filing a tax return is the worst part of working for themselves, while one in six admitted the process makes them reconsider being self-employed altogether.

London-based freelance producer Connor Gani said the system feels stacked against sole traders. “Every year, I’m forced to navigate the same system a limited company uses, scrolling through endless pages that don’t apply to me, with constant warnings about penalties,” he said. “You’re always worried you’ve underpaid, but you rarely know if you’ve overpaid either. With little clarity on what you can expense, it’s almost impossible to feel confident you’ve got it right.”

He added that the timing of the deadline compounds the problem. “November to February is often quieter for freelancers. Spending hours on tax instead of finding work feels brutal – and it’s a big reason I’m considering going back into full-time employment.”

The stress is spilling over into personal lives too. Nearly 40 per cent of respondents said they felt anxious over the Christmas period or failed to feel rested because they spent the break worrying about their tax return. One in ten said the process derailed their New Year’s resolutions, while around 600,000 people said tax stress ruined their Christmas altogether.

Asked why they delay filing, respondents pointed to the pressure of the process itself, competing work demands, the need to prioritise income generation, and the cost of hiring an accountant. More than a quarter said they would rather clean the fridge than tackle their tax return.

The cost of delay is significant. Last year, HMRC issued more than £110 million in late-filing penalties after over one million people missed the deadline. Anyone who files late automatically receives a £100 fine, with additional daily penalties applying after three months.

Martin Ott, chief executive of Taxfix, said the system is no longer fit for purpose. “With the longest tax code in the world and constantly changing rules – including the rollout of Making Tax Digital – self-assessment is not getting any easier,” he said. “Tax filing should be as simple as ordering a pizza. No one should be paying unnecessary fines because of an outdated, overly complex process.”

Looking ahead, most self-assessors said their relationship with tax would improve significantly if the system were simplified. Many want clearer rules on deductions, less complexity in tax law and mobile-friendly filing that fits around modern working lives.

Read more:
Tax returns driving regret as self-employed Brits rethink going solo

UK small businesses face fresh cost pressures after the European Union confirmed it will introduce a new customs charge on low-value parcels entering the bloc from July 2026.

Under the new rules, the EU will apply a flat €3 customs duty on parcels valued at less than €150, ending the long-standing “de minimis” exemption which currently allows such goods to enter without charge.

The British Chambers of Commerce (BCC) has warned the move will significantly affect UK exporters, particularly small and medium-sized firms that rely on low-value shipments to serve customers across Europe.

William Bain, head of trade policy at the BCC, said that while UK-originating goods will remain tariff-free under the Trade and Cooperation Agreement, the introduction of customs duties and handling fees will still damage competitiveness.

“Although UK originating products will still be tariff free, they will now face customs fees and potentially separate handling charges levied by individual EU countries,” Bain said. “This extra cost will make goods from Great Britain less attractive to both businesses and consumers in the EU and squeeze profit margins.”

The new charge is due to come into force on 1 July 2026, ahead of a wider package of EU customs reforms scheduled for January 2028. Those reforms aim to overhaul how low-value goods are processed at the EU’s borders, in part to tackle the rapid growth in e-commerce imports.

The announcement also comes as the UK government considers its own changes to customs rules. A consultation is already under way on abolishing the UK’s de minimis threshold from 2029, raising concerns among exporters that cross-border trade costs could rise on both sides of the Channel.

Bain said the EU’s decision should act as a catalyst for action in Westminster. “The government must now consider wider customs reforms and the introduction of a Single Trade Window to ease costs for our firms,” he said. “It will also need to review the impact of these EU changes on customs rules between Great Britain and Northern Ireland.”

For many UK small businesses, particularly those operating in online retail, fashion, consumer goods and specialist manufacturing, low-value shipments have been a key route into EU markets since Brexit. Industry groups fear the additional costs could deter EU customers or force firms to absorb charges that further erode already tight margins.

With July 2026 approaching, business groups are urging ministers to engage with Brussels and accelerate domestic reforms to ensure UK exporters are not left at a competitive disadvantage.

Read more:
New EU customs duties set to hit UK small businesses, warns BCC

More than 5,500 small business owners across the UK have signed an open letter to Chancellor Rachel Reeves, warning that planned business rates changes due to take effect in April 2026 could force thousands of firms to shut their doors.

The letter, organised by Reform UK MP Rupert Lowe, has been backed by pub landlords, café owners, shopkeepers and local employers who say they are already operating at breaking point after a decade of compounding economic shocks.

Signatories argue that the upcoming revaluation and the withdrawal of existing relief schemes risk tipping otherwise viable businesses into closure, particularly on high streets and in community locations where fixed property costs cannot be avoided.

The intervention comes as the government prepares to overhaul how business rates are calculated, with the current Retail, Hospitality and Leisure Business Rates Relief scheme, which provided a 40 per cent discount in the 2025–26 financial year. set to end from April next year. That relief, introduced in various forms during and after the pandemic, has been a critical support for many businesses navigating the cost-of-living crisis.

Under the new system, updated rateable values will be introduced alongside revised multipliers, with the government arguing this will create a fairer, more sustainable framework. However, many businesses warn that the new reductions will not compensate for the loss of relief, leaving them facing sharply higher bills,  particularly medium-sized operators and larger premises in high-cost areas such as the South East.

Business owners say the changes come at the worst possible time, as firms continue to grapple with rising rents, energy costs, insurance premiums, staffing pressures and lingering Covid-related debt, while consumer demand remains fragile.

In the open letter to the Chancellor, signatories describe business rates as an unavoidable fixed cost that disproportionately penalises physical premises.

“We are business owners, pubs, cafés, shops and local employers, who have kept going through a brutal decade,” the letter states. “We adapted, borrowed, cut our own wages and worked longer hours just to stay open. Now we’re facing a business rates revaluation that, for many of us, will be the final straw.”

The letter urges the government to carry out an urgent review of the impact of the revaluation on small businesses and to introduce meaningful mitigation measures to prevent widespread closures.

Rupert Lowe MP said the scale of the response demonstrated the severity of the situation facing the high street. “Business rates punish physical presence and community businesses,” he said. “Unless the Chancellor acts quickly, we will see permanent closures across the country. Once these businesses go, they will not come back.”

For many business owners, the issue is no longer about marginal profitability but basic survival. While ministers argue the reforms will rebalance the system, those on the ground fear they are being asked to absorb costs they simply cannot afford.

As April 2026 approaches, pressure is mounting on the Treasury to revisit the reforms. Whether the Chancellor chooses to act may determine the fate of thousands of local businesses — and the future shape of Britain’s high streets.

Read more:
5,500 small businesses demand urgent review of business rates in open letter to Reeves

Small business owners are warning that 2026 could be one of the most challenging years in recent memory, with many saying they feel overwhelmed by a convergence of rising costs, regulatory change and strategic uncertainty.

After a bruising 2025 marked by higher national insurance contributions, elevated borrowing costs and stubborn inflation squeezing consumer spending, SMEs say the outlook for the year ahead offers little respite. Business owners argue that policies announced in last November’s Budget, combined with new employment legislation, risk pushing firms to automate roles, adopt AI more aggressively or outsource work overseas rather than hire domestically.

The recently passed Employment Rights Act will widen access to family-friendly policies, including immediate entitlement to paternity leave for an estimated 32,000 additional fathers each year. From April, a new Bereaved Partner’s Paternity Leave will also provide up to 52 weeks of leave for partners who lose a spouse before their child’s first birthday. At the same time, statutory sick pay will apply from day one, unfair dismissal rights will move to a six-month qualifying period, and both the minimum wage and living wage are set to rise.

For many SME leaders, the cumulative effect is creating acute pressure.

Kate Allen, owner of holiday accommodation business Finest Stays, said her biggest concern for 2026 is uncertainty around artificial intelligence. She warned that while AI offers opportunities, it also creates anxiety for founders unsure when, or whether, to invest.

“There’s a real fear of missing the bandwagon,” she said. “But jumping too early can be just as dangerous as waiting too long. The hardest part isn’t adopting AI — it’s knowing what not to adopt and where not to sink serious money.”

Colin Crooks MBE, chief executive of Intentionality, said the dominant theme he sees across sectors is overwhelm. “Business owners are drowning in a perfect storm of pressures,” he said. “Recruitment challenges, cashflow squeezes, rising costs, regulation and new technology are all hitting at once. Leaders are struggling to prioritise and can’t see a clear path through the noise. The ability to focus isn’t a ‘nice to have’ anymore — it’s a survival skill.”

Tony Redondo, founder of Cosmos Currency Exchange, said many SMEs now view 2026 as a year of suppressed confidence and rising risk. He warned that changes to employment law have significantly increased the perceived cost of a poor hiring decision.

“With unfair dismissal rights kicking in after six months, many owners are paralysed by recruitment risk,” he said. “At the same time, removing statutory sick pay waiting days turns illness into a day-one financial hit. Add in frozen tax thresholds, Making Tax Digital and the de-banking crisis driven by automated compliance systems, and it’s no surprise many SMEs are now looking overseas for both talent and growth.”

Astrid Davies, chief executive of Astrid Davies Consulting, said she is seeing growing anxiety around sustainability commitments, with some firms tempted to deprioritise ESG efforts amid wider pressures.

“There’s a real ‘sustainability wobble’,” she said. “Businesses want to do the right thing, but don’t always know how — or feel that global attention has moved on. That’s a mistake. Doing the right thing well helps cut waste, retain talent and stand out in an unforgiving market. It’s also a marker of leadership quality.”

As small business owners look ahead to 2026, many say the challenge will be less about a single policy change and more about navigating the combined impact of regulation, technology and cost pressures — all while maintaining confidence in an increasingly fragile economic environment.

Read more:
Small business owners warn of a ‘perfect storm’ of pressures heading into 2026

Almost one in five self-employed people in the UK expect to struggle to pay their Self Assessment tax bill this month, underlining the mounting financial pressure facing sole traders and freelancers at the start of 2026.

With the 31 January deadline fast approaching, new research suggests around 880,000 of the UK’s 4.4 million self-employed workers are worried about finding the cash to settle their tax bill, leaving many exposed to late-payment penalties and interest.

The findings point to a broader squeeze on the self-employed, for whom January has become an annual stress point rather than a fresh start. One third of respondents said maintaining healthy cash flow was their biggest concern, while the same proportion worried about whether they could afford to pay themselves at all amid rising living costs. A further 34 per cent cited escalating energy bills as an additional strain on already tight margins.

Tax policy is compounding those pressures. Almost two thirds of those surveyed said they are concerned about the ongoing freeze on income tax thresholds, which continues to pull more self-employed workers into higher effective tax bands despite stagnant real incomes.

Mike Parkes, technical director at GoSimpleTax, said the research reflected a familiar and recurring challenge for many people running businesses on their own.

“For a lot of self-employed workers, January is the most financially stressful month of the year,” he said. “Tax bills land on top of worries about cash flow, energy costs and everyday expenses. For some people, this pressure comes around every single year.”

He added that the scale of the issue was being made worse by delays in filing. More than 5.6 million people have still not submitted their Self Assessment return, meaning many may not yet know how much they owe or have had time to plan for it.

“Filing earlier gives people clarity,” Parkes said. “It allows them to understand what they owe, spread the cost where possible and avoid nasty surprises at the last minute.”

With weeks still to go before the deadline, GoSimpleTax is urging sole traders, freelancers and landlords who are worried about paying their bill to act now rather than wait until the final days of January.

Many self-employed workers deal with irregular income and unpredictable workloads, making it harder to set money aside consistently throughout the year. But Parkes stressed that help is available, from digital tools that simplify tax calculations to payment options that can reduce short-term strain.

“For those feeling the pressure, it’s important to remember you’re not alone,” he said. “There are tools and support available to help people get through January without it becoming a financial crisis.”

Read more:
Nearly 900,000 self-employed Brits fear they won’t afford their January tax bill

Confidence among UK business owners edged up in December, but for sole traders and microbusinesses, the reality on the ground remains one of caution, stalled hiring and postponed spending.

New figures from the Institute of Directors show its Economic Confidence Index rose to -66 in December, from -73 in November, suggesting the immediate shock of the Budget has faded.

But confidence in respondents’ own businesses barely moved, staying at -4, highlighting how limited that optimism feels for people actually running businesses day to day.

For the smallest businesses, the forward-looking signals are telling:
• Headcount plans worsened, with fewer firms expecting to take on staff
• Investment intentions fell again, as owners conserve cash
• Costs remain stubbornly high, despite a slight easing
• Revenue expectations are flat, not growing

This aligns closely with what Not.Ltd founders have been saying for months, that uncertainty around tax, employment rules and running costs makes expansion feel like a risk, not an opportunity.

Anna Leach, the IoD’s Chief Economist, said December’s improvement needs to be seen in context.

“Yes, confidence lifted slightly — but it’s still close to the lows seen during Covid,” she said. “Hiring freezes remain widespread, and investment is being postponed or cancelled as companies protect cash.”

She added that while reduced policy volatility could help in 2026, it won’t fix the fundamentals facing smaller firms.

What would actually help small businesses in 2026?

When business owners were asked what would make the biggest difference next year, their answers were clear:
• Lower business taxes
• Fewer changes to employment law
• Simpler regulations
• Lower energy costs
• Less complex tax rules

For sole traders and microbusinesses, the message is blunt: confidence isn’t rebuilt by optimism alone. It comes from stability, predictable costs and fewer policy shocks.

Read more:
IoD: confidence lifts slightly, but small businesses are still hitting pause on hiring and investment

Britain’s smallest hospitality businesses are quietly cutting back staff hours as soaring costs and fragile consumer confidence squeeze already thin margins.

New data from Bristol-based hospitality recruitment platform Limber shows that the average number of shift hours posted by pubs and restaurants has fallen by 30% since 2022, underlining the brutal trading reality facing independent operators.

According to Limber, the average hospitality business advertised 112 shift hours per month in 2022. By 2025, that figure has dropped to just 79 hours, as owners attempt to control costs by running leaner rotas and doing more work themselves.

For sole traders, owner-operators and micro-hospitality businesses, this trend is less about efficiency and more about survival.

Chris Sanderson, chief executive of Limber, said the shift reflects a sector still struggling to recover from the pandemic while absorbing a wave of new cost pressures.

“Hospitality was hit hard during Covid, but the damage didn’t stop there,” he said. “Rising wages, higher employer National Insurance, increased business rates and softer consumer demand mean businesses are quieter than they were before, and they’re having to do more with less.”

For many independents, reduced shift hours translate directly into owners stepping back behind the bar, into the kitchen or onto the floor to keep the business afloat.

Danny Matthews, owner of The Pennycress, an independent coffee shop in South Cerney, said cutting back staff hours was often the only option left.

“The biggest killers right now are wages and business rates,” he said. “We’ve had to raise prices, but only carefully. Customers understand to a point — but there’s a ceiling.”

Matthews said his business has absorbed certain costs, such as alternative milks, despite them sometimes costing double the price of dairy.

“Hospitality margins were always thin. Now they’re almost non-existent. You either cut hours, cut yourself a wage, or close.”

For many Not.Ltd-style businesses, cafés, pubs, bakeries, mobile food operators, staffing flexibility is the last lever left to pull.

HR and employment specialist Kate Underwood said closures and reduced staffing were not a sign of poor leadership, but of an environment stacked against small operators.

“When a pub or café closes, it’s like a town losing its living room,” she said. “Hospitality isn’t failing because owners can’t run businesses. It’s being bled out by rising bills while expectations stay sky-high.”

Underwood said the most common survival tactics she sees among independents include ruthless rota planning and stripping menus back to high-margin items.

Until consumer confidence improves, or government policy meaningfully addresses costs like business rates, energy and employer NICs, many small hospitality businesses are likely to remain in “hold-the-line” mode well into 2026.

For thousands of sole traders and micro-operators, cutting shift hours isn’t a strategy. It’s the only way to stay open.

Read more:
Hospitality shift hours fall 30% as small operators cut back to survive rising costs

Small businesses across the UK have recovered more than £10 million in overdue invoices with help from the Office of the Small Business Commissioner, as pressure mounts on larger companies to improve payment practices.

The milestone includes almost £1 million recovered so far in the current financial year alone, three times the amount secured over the same period last year. More than £500,000 was recovered in December 2025, highlighting a sharp acceleration in activity as small firms seek support in chasing unpaid bills.

Set up under the Enterprise Act 2016, the Small Business Commissioner has a statutory role to review complaints from small businesses facing late or unfair payment practices by larger organisations. The office acts as an intermediary, investigating disputes, challenging poor payment behaviour and pushing for resolution on behalf of smaller suppliers.

The intervention comes against a bleak backdrop. Government research estimates that late payments cost the UK economy around £11 billion a year, with roughly 4,000 businesses closing annually as a direct result — the equivalent of 38 firms every day.

Earlier this year, ministers launched a consultation on further measures to tackle late payment, including proposals to strengthen the commissioner’s enforcement powers, amid growing concern that voluntary codes have failed to shift behaviour at scale.

One small IT company supported by the commissioner said the intervention proved critical after months of failed attempts to recover an unpaid invoice from a large travel business.

“We’d tried emails, phone calls and website forms, but the invoice had simply been overlooked,” a spokesperson said. “As a microbusiness of four people, we weren’t high on their radar. Thanks to the Small Business Commissioner’s support, we were able to make payroll this month.”

Emma Jones, the Small Business Commissioner, said the £10 million recovery figure showed what could be achieved when small firms came forward.

“Late payment is not only bad for business, it also takes a serious toll on founders’ mental health as they worry about paying staff and keeping the lights on,” she said. “We can only deliver these results if small businesses contact us, and I want to thank every owner who has trusted us to investigate their case.”

Jones added that the near-£1 million recovered so far this year reflected both rising awareness of the service and the scale of the problem still facing small suppliers.

The commissioner’s office is urging any small business with an unresolved payment dispute involving a larger customer to come forward, warning that even well-intentioned firms can allow invoices to slip when suppliers fall off procurement systems or change status.

As pressure builds for tougher enforcement, the figures underline a simple reality: for many small businesses, getting paid on time can mean the difference between survival and closure.

Read more:
£10m clawed back for small firms as commissioner steps up late payment action

It may have built its reputation on viral dances and resurrecting forgotten pop hits, but TikTok is rapidly establishing itself as a serious force in UK retail.

More than 200,000 small and medium-sized businesses across the UK are now selling through TikTok Shop, the platform’s in-app ecommerce service, alongside major household names including Marks & Spencer, Sainsbury’s, Samsung, QVC and Clarks.

Since launching in the UK in 2021, TikTok Shop has grown at pace. This year it recorded its biggest-ever UK sales day on Black Friday, when 27 items were sold every second. Across the Black Friday and Cyber Monday weekend, sales rose by 50% compared with last year, underlining how quickly social commerce is gaining traction.

The model allows brands to sell directly within the TikTok app via shoppable videos, livestreams and embedded product links, as well as through a dedicated shop tab on their profile. Purchases are completed without users leaving the app, with revenues split between TikTok, the seller and, where relevant, creators using affiliate links.

For established retailers, the platform is proving an effective way to reach younger audiences. Sainsbury’s, one of the first supermarkets to embrace TikTok Shop, saw its Tu Christmas pyjamas sell out in under a week following a sponsored collaboration with influencer Rachel Spicer that generated 6.6 million views.

M&S has also reported strong results from livestream shopping. One recent session attracted around 260,000 viewers and generated sales at a rate of roughly one item every 30 seconds, highlighting the power of live commerce to convert attention into transactions.

Smaller businesses, meanwhile, are using TikTok Shop to cut through increasingly crowded online marketplaces, particularly as AI-driven search makes it harder to gain visibility elsewhere. Newcastle-based online meat retailer The Fat Butcher is selling fresh turkeys on the platform for the first time this year, while beauty, fashion and jewellery brands are among the fastest adopters.

Danielle Dullaghan, social strategy director at global marketing agency Iris, said beauty brands in particular were seeing strong commercial returns. “TikTok Shop plays directly into impulse buying behaviour,” she said, adding that the blend of entertainment and commerce was proving highly effective.

London jewellery brand L’ERA, run by Lara Mar alongside her daughters Talia Mar and Angele Sofia, expects to generate around £145,000 in revenue via TikTok this year. “It has almost doubled year on year, and many of our online customers originally discovered us via TikTok,” Mar said.

The business relies heavily on live shopping, typically hosting three three-hour livestreams a week, rising to six during peak periods such as Black Friday and Christmas. TikTok shoppers have also shown a willingness to spend, with L’ERA’s largest single order exceeding £1,400.

However, some caution that the model is not without risks. Business and social media consultant Jules Brim described TikTok Shop as “a gamechanger” for reach and sales but warned of mounting pressures on small brands.

“It can create a race to the bottom on pricing, put pressure on businesses to produce constant content, and shift the focus from long-term brand building to chasing trends,” she said.

Even so, with hundreds of thousands of UK businesses now signed up and major retailers investing heavily in in-app selling, TikTok Shop is fast becoming a central pillar of the modern retail landscape, blurring the line between entertainment, influence and ecommerce.

Read more:
‘A gamechanger’: 200,000 UK small businesses sign up to TikTok Shop

Entrepreneurship in the UK continues to be driven by opportunity rather than necessity, with founders launching businesses faster than ever and embracing new technologies at pace, according to new findings from the 2025 UK StartUp Report.

The research paints a picture of a confident, ambitious and highly educated founder community, motivated by independence, creativity and long-term growth rather than financial survival. However, it also reveals widespread frustration that entrepreneurship remains undervalued by society and government, with persistent inequalities in access to finance, networks and scale-up support.

Speed to market has become a defining feature of modern UK start-ups. Nearly seven in ten founders launched their business within a year of developing their initial idea, with one in four doing so in under three months. The home remains the dominant base for early-stage businesses, with 68 per cent launched from a founder’s residence, reflecting the flexibility enabled by digital tools and remote working.

UK founders are also highly educated. Seven in ten have a university degree, including more than a quarter with a master’s qualification and five per cent holding a PhD. Artificial intelligence is now firmly embedded in early-stage business activity, with 72 per cent of founders already using AI in their operations. Adoption is particularly strong among tech founders and younger entrepreneurs, highlighting how rapidly AI has shifted from emerging technology to mainstream business infrastructure.

Despite a widening range of funding options, most founders still rely on bootstrapping. More than nine in ten self-funded their business at launch, and four in ten required less than £10,000 to get started. However, the report highlights stark disparities. Women founders are significantly more likely to start with lower levels of capital, while founders in more prosperous regions are twice as likely to raise £100,000 or more at the outset.

Ambition to grow is strong, with 57 per cent of founders planning to raise external finance in the next year. Yet access to angel, venture and innovation funding remains concentrated among better-networked founders, particularly in the tech sector and in the UK’s most economically advantaged regions.

Founders are clear about the support they need most. Operational priorities include bookkeeping, tax compliance, financial forecasting and cash-flow management, while demand for legal help is led by contracts and intellectual property. Marketing support is also in high demand, particularly around PR and reputation management. However, many founders report that the support landscape is fragmented, difficult to navigate and too often focused on compliance rather than growth.

Perhaps most striking is the perception gap around entrepreneurship. Fewer than three in ten founders believe starting a business is widely seen as a desirable career choice, and only a quarter feel that successful entrepreneurs are appreciated by society. Just one-third believe government truly values entrepreneurs’ contribution to the economy. By contrast, there is overwhelming support for enterprise education, with nearly nine in ten believing entrepreneurship should be taught across schools, colleges and universities.

Professor Dylan Jones-Evans, author of the report, said the findings highlight both resilience and systemic shortcomings. He argued that while UK founders are more diverse, digital and globally connected than ever before, the ecosystem supporting them has failed to keep pace.

“The UK has no shortage of ideas, talent or ambition,” he said. “What we’re missing is a support system that matches the pace of modern entrepreneurship – consistent, connected and genuinely inclusive. If we want more start-ups to become scale-ups, we must democratise access to finance, build integrated support ecosystems and treat entrepreneurship not as a by-product of the economy, but as a cornerstone of its future.”

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UK entrepreneurship remains opportunity-led, but founders feel undervalued and under-supported

As many prepare to wind down for the festive season, new research highlights the growing pressures facing small business owners across the UK — with burnout, guilt over time off and mental health concerns increasingly common.

A survey of 250 sole traders and small business owners by business insurance experts at MoneySuperMarket found that 42 per cent feel burnt out by the end of the year, while one in three (33 per cent) say running a business has negatively affected their mental health in 2025.

The research shows that the festive period is far from a break for many entrepreneurs. For more than a third of business owners (35 per cent), the stretch between Christmas and New Year represents a key trading window, putting added pressure on those weighing up whether they can afford to switch off.

Although just over half (51 per cent) plan to close their businesses during the festive period, one in five say they will feel guilty about taking time off, reflecting the emotional burden many owners carry alongside financial responsibility.

The findings also suggest that a significant minority will not stop at all. One in 15 business owners, equivalent to around 385,000 people nationwide, expect to work on Christmas Day, underlining how difficult it can be for small firms to fully disconnect.

Despite the challenges, many business owners are determined to make changes in the year ahead. More than half (51 per cent) said they are setting resolutions to improve their work-life balance as they head into 2026.

When asked how they plan to do this, the most popular intentions were: setting stricter working hours (47 per cent) and delegating more tasks to reclaim personal time (46 per cent)

The findings suggest a growing recognition among entrepreneurs that long-term sustainability depends not just on business performance, but also on personal wellbeing.

Alicia Hempsted, business insurance expert at MoneySuperMarket, said the results highlight the strain many small business owners face at the end of the year.

“Small business owners are the backbone of the UK economy, yet many find themselves stretched thin as the festive season approaches,” she said. “It’s positive to see more entrepreneurs focusing on balance in 2026, but the reality is that pressures remain high.

“Having the right support, from setting clear work-life boundaries to making sure you have the right business insurance, can help ease some of the strain and provide peace of mind if the unexpected happens.”

With burnout increasingly common and many owners struggling to truly switch off, the research suggests that while optimism for change exists, meaningful support and structural adjustments will be essential if small businesses are to enter 2026 healthier, more resilient and better balanced.

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Four in ten small business owners feel burnt out as Christmas pressure mounts, survey finds

First-time buyers, the self-employed and older borrowers could find it easier to secure a mortgage under proposed reforms from the UK’s financial regulator, designed to make lending rules more flexible and better suited to modern working lives.

The Financial Conduct Authority (FCA) has outlined plans to simplify mortgage regulations and loosen some restrictions on lenders, allowing them to offer products that better reflect “different working patterns and income levels at different stages of life”. The regulator said the changes would help first-time buyers and other “under-served consumers” gain access to home ownership.

As part of the proposals, the FCA is also reviewing its approach to interest-only mortgages, with a view to making them more accessible for older borrowers. It said it would launch a focused market study into whether the lifetime mortgage market is equipped to meet the evolving needs of future customers.

The regulator also plans to encourage greater use of data and technology, including artificial intelligence, to help mortgage brokers provide “better and faster advice while keeping a human touch”. In addition, it will examine how to simplify mortgage advertising and disclosure rules so that consumers can more easily understand information online.

David Geale, executive director for payments and digital finance at the FCA, said the aim was to “widen access to affordable mortgages to meet the needs of consumers today”.

Public consultation on the proposed changes is expected to begin early next year, with the FCA aiming to introduce the first reforms later in the year.

The proposals follow pressure from the government on regulators to help support economic growth. The FCA has already moved this year to relax aspects of the mortgage affordability framework.

In March, the regulator told lenders there was flexibility in how they applied interest-rate stress tests, the checks used to assess whether borrowers could still afford repayments if rates rise in future. The FCA said some lenders had been overly cautious, unnecessarily restricting access to mortgages that were otherwise affordable.

Following the intervention, the regulator said lenders had widened borrowing options, enabling many borrowers to access around £30,000 more than before. It also noted that despite higher interest rates and rising living costs, 99 per cent of mortgages taken out since tighter lending standards were introduced in 2014 are not in arrears, and that first-time buyer numbers have remained resilient.

Further reforms under consideration include measures to help people with uneven or irregular incomes, such as the self-employed, as well as those who have previously experienced debt problems but have since improved their credit profiles.

For older homeowners, the FCA is exploring ways to help people unlock more of the wealth tied up in property to support later-life living standards.

“Reforming the mortgage market can help address the fact that, as a society, we’re saving too little for later life, yet people have huge wealth tied up in property,” Geale said. He added that specialised interest-only mortgages aimed at those in retirement could help people meet their financial goals as part of a broader financial plan.

In a speech last month, FCA chief executive Nikhil Rathi said the regulator had examined who was being “locked out of homeownership, why and for how long”.

He said the FCA wanted to enable a “mortgage market of the future” that adapts to changing technology, employment patterns and demographics,  particularly as consumers live and work for longer.

Rathi questioned whether some of the UK’s estimated £9 trillion of housing wealth could be “unlocked more effectively and put to more productive use”, adding that the mortgage market should help people access that wealth “at the right time, when it’s needed, offering fair value, not as a last resort”.

Read more:
Mortgage rules set to ease for self-employed buyers

Tool theft is costing UK tradespeople thousands of pounds each time, with new research revealing that the average cost of replacing stolen equipment now stands at £3,092 — despite more than a quarter of workers continuing to store tools in vehicles overnight.

A survey of 500 UK tradespeople by temporary business van insurance specialist Tempcover found that over seven in ten (72%) have been victims of tool theft, either directly or through the theft of a van containing tools. More than a quarter (27%) said they had experienced tool theft on more than one occasion.

For many, the impact goes far beyond inconvenience. Stolen tools can bring work to an immediate halt, disrupt schedules and leave tradespeople significantly out of pocket while replacements are sourced.

The findings highlight a clear disconnect between concern and behaviour. While 88% of respondents said they are worried about tool theft, 28% admitted they usually leave their tools in a locked vehicle overnight — a practice security experts consistently warn against due to the risk of opportunistic crime.

More than half of tradespeople (53%) said they store tools in a locked garage or workshop, while 41% take them into their home. Around 22% keep tools on site. However, among those who have never experienced tool theft, nearly half (48%) said they have not changed their security habits, despite the risks.

By contrast, those who had been targeted were far more likely to take action. Of tradespeople who had experienced tool theft, 96% said they changed their behaviour, including taking tools indoors overnight, installing lockable toolboxes and upgrading van security.

The research also uncovered significant variation in how tradespeople insure their tools. Just over a quarter (27%) have a dedicated tools insurance policy, while 22% rely on cover included in their van or vehicle insurance. A further 13% depend on home contents insurance, which may not always provide adequate protection for business equipment.

Smaller numbers are insured through their employer (8%) or another type of policy (2%), while 6% reported having only partial cover. Worryingly, almost one in five tradespeople (18%) said they currently have no insurance for their tools at all.

Claire Wills-McKissick, temporary business van insurance expert at Tempcover, said the findings show many tradespeople remain unnecessarily exposed.

“Our research highlights that while most tradespeople are concerned about tool theft, many are still leaving themselves exposed,” she said. “Whether it’s your own van, a company vehicle, or a borrowed van with temporary insurance, leaving tools unattended or overnight can put them at risk — and potentially invalidate an insurance claim.”

She added that relatively simple steps can significantly reduce risk.

“Taking tools inside, using lockable toolboxes, keeping a detailed inventory and marking equipment can make a real difference. Planning ahead and taking these precautions doesn’t just protect your tools; it can also help prevent costly delays and serious financial loss.”

With tool theft continuing to affect a majority of UK tradespeople, the research suggests that improving day-to-day security habits — and ensuring adequate insurance cover — could be as important as any technological solution in protecting livelihoods.

Read more:
Tool theft costs UK tradespeople £3,092 on average, despite 28% leaving tools in vans overnight

A redress scheme created to rebuild trust between small businesses and banks after a series of lending scandals has entered liquidation, having paid out more to its senior staff than it did to the businesses it was meant to help.

Liquidators were appointed to the Business Banking Resolution Service (BBRS) last week, bringing the scheme to an end amid mounting criticism that it had “delivered virtually nothing” for victims of banking misconduct. The closure comes despite long-running disputes over the scheme’s independence and effectiveness.

The BBRS was launched in 2021 in response to historic lending scandals that affected tens of thousands of small firms. It was designed to provide an alternative route to dispute resolution for companies considered too large for the Financial Ombudsman Service but too small to pursue costly legal action against banks.

At its launch, the scheme was billed by its chairman, Lewis Shand Smith, as a “trusted, transparent and fair dispute resolution service”. However, it quickly became mired in controversy over its narrow eligibility criteria, the small number of cases it handled, concerns about transparency, and the level of pay awarded to senior executives.

By the scheme’s own assessment, it covered just 1 per cent of the small and medium-sized enterprise (SME) banking market. Last year, it emerged that the BBRS had paid more to its highest-paid director than it had arranged in total financial redress for complainants.

In May, the service disclosed that only 47 claimants had received awards through its formal adjudication process since its inception, despite initial claims from the banking industry that more than 60,000 businesses could fall within scope.

Carrie James and Nick Parsk, of legal and financial firm Oury Clark, were appointed as liquidators as the BBRS entered members’ voluntary liquidation — a process used to wind up solvent companies.

Kevin Hollinrake, the Conservative Party chairman and MP, who was closely involved in early discussions around the scheme’s creation but later became a vocal critic, said its failure should serve as a warning.

“It promised justice for businesses with valid complaints but delivered virtually nothing,” he said. “Too many SMEs have been left without answers and without redress from a system that was supposed to support them.”

Hollinrake said SME groups had warned from the outset that the scheme was “fundamentally flawed”.

“A voluntary system designed and controlled by the very institutions it was meant to hold to account was never going to deliver the fairness businesses deserved,” he said, adding that the scheme’s closure should mark a “turning point” towards a mandatory and genuinely independent dispute resolution system.

UK Finance, the banking industry trade body, defended the scheme, saying the anticipated volume of cases had not materialised despite repeated awareness campaigns.

“The BBRS was set up on an expectation that there would be a large number of potential cases, which subsequently did not materialise,” it said. “Throughout its time in operation, the BBRS delivered according to the eligibility criteria agreed with all relevant parties, including the main SME groups.”

The liquidation comes against the backdrop of ongoing legal action. The appointed liquidators said they were aware of civil litigation brought by a user who claims the BBRS was wrong to dismiss their complaint.

In one high-profile case, the BBRS unsuccessfully appealed a court decision allowing Romek Kriwald, a small business owner, to amend his claim against the service. During the proceedings, lawyers for the BBRS argued that the organisation did not owe complainants duties of care, skill or good faith, claiming its primary legal obligations were to the banks that funded it.

In court, a barrister for the service said the participating banks, rather than users, were owed certain obligations because “it was the participating banks that paid for the scheme, it’s their money and their reputation at stake”.

Hollinrake, who previously likened the BBRS to a “nightclub bouncer hired by the banks”, said the episode highlighted the need for reform.

“We need a genuinely independent, mandatory dispute resolution system that puts SMEs first — not the banks,” he said.

Shand Smith has previously defended the service, saying it “helped hundreds of SMEs reach resolutions”, “helped to build trust across the sector” and that staff could be “proud of their important work”.

For many small business owners affected by past lending scandals, however, the closure of the BBRS is likely to feel less like closure — and more like another missed opportunity for meaningful redress.

Read more:
Lending scandal redress scheme for small firms enters liquidation

Five Welsh entrepreneurs have been recognised for their progress and ambition as the Business Wales Start-Up Accelerator celebrated the latest cohort of award winners, underlining the programme’s role in transforming early-stage ideas into scalable, investment-ready ventures.

The founders completed the ten-week accelerator programme, which supports Wales-based entrepreneurs in validating demand, refining their business models and securing their first customers. Each winner was recognised across five award categories, reflecting both commercial momentum and the diversity of start-up talent emerging from across Wales.

The Proposition Flex Award, recognising the most adaptable approach to developing a business launch proposition, was awarded to Chris Hughes, founder of Tecwila. Based in Anglesey, Tecwila is a flavour-led spirits brand working with a Mexican distillery to produce small-batch spirits for the UK market. The business is now preparing for wider distribution following initial production and brand development completed during the programme.

The Accelerator Award, given to the participant who made the most progress during the programme, went to Dr Emma Marie Williams, founder of GlitterBrain Psychology. GlitterBrain delivers psychology-based self-help and therapy resources for adults, including neurodivergent clients, focusing on practical, accessible tools that support mental health and everyday life management.

“This award feels brilliant because it shows how far we’ve come,” said Dr Williams. “Ten weeks ago, I had passion and a vision but no clear strategy. The programme helped me test my assumptions and hone my business skills, and now I have a clear growth plan.”

The Sales Accelerator Award, recognising ambition in building and accelerating a sales funnel, was presented to Silvia Sanchez, founder of Classer Ltd. Classer provides software that helps users organise, store and share action-camera footage, enabling GoPro and action-camera users to turn raw video into easily relived memories.

The Accelerator Champion Award, celebrating commitment and a positive mindset throughout the programme, was awarded to Sakshi Mahajan, founder of Hashview. The business offers a next-generation trust engine for local shops, service providers and SMEs, combining AI-driven sentiment analysis, SaaS analytics and geo-fencing technology to deliver real-time, authentic customer feedback.

The Most Collaborative Participant Award went to Vignesh Pathmaraj, founder of Elements Technik (Elements Supply AI). The company provides AI-driven procurement and spare-parts intelligence for manufacturing and industrial clients, helping businesses streamline sourcing and supplier management through automation and data-driven insights.

The latest cohort’s success coincides with growing evidence of the Start-Up Accelerator’s longer-term impact. One standout graduate is Aberystwyth-based LanoTech, which has built a £470,000 investment pipeline since completing the programme in July 2025.

LanoTech is pioneering the use of lanolin — the natural grease found in sheep wool — as a sustainable alternative to soy and vegetable oil in animal feed. Following the accelerator, the company secured £120,000 through the Welsh Government’s Contracts for Innovation Cymru Programme to fund world-first live poultry feed trials. Founder Clodagh Weingart then successfully secured a further £350,000 from Innovate UK for a project commencing in 2026.

Lab testing has shown lanolin to have a higher gross energy content than conventional feed oils, positioning the business to reduce agriculture’s carbon footprint while creating new value streams for British wool producers.

“The foundation provided by the Start-Up Accelerator has been instrumental in positioning LanoTech for scale-up,” said Weingart. “The programme gave me the structure to develop a compelling investment case and the confidence to articulate our vision to funders. Moving from concept to securing nearly half a million pounds in funding within months of graduating shows the practical impact of that intensive support.”

Lucy Jones, operations manager of the Business Wales Start-Up Accelerator, said the results reflect the programme’s focus on structured growth and founder capability.

“Seeing founders secure investment, land first customers and refine their business models is exactly what the Start-Up Accelerator is designed to achieve,” she said. “LanoTech’s success demonstrates how the programme creates the conditions for businesses to thrive through expert guidance, structured methodology and a strong peer network.”

The next Start-Up Accelerator cohort will run from Tuesday 12 May to Friday 17 July 2026, with applications closing on Monday 30 March 2026. The programme is part of the Accelerated Growth Programme, a Business Wales service funded by the Welsh Government.

It supports Wales-based entrepreneurs with pre-revenue ideas capable of reaching £1 million in annual turnover, creating at least ten full-time jobs and exporting by 2029. Funding is available to help remove barriers to participation, and the programme integrates AI tools to speed up market research, creativity and time-to-market.

Entrepreneurs interested in applying can register their expression of interest via Business Wales.

Read more:
Five Welsh entrepreneurs recognised as start-up accelerator celebrates latest award winners

Small firms across England are set for a major boost as the government unveils new procurement powers allowing councils to reserve lower-value public contracts for local suppliers — a change expected to redirect more than £1 billion a year into local economies.

Under reforms announced today, councils, police forces and fire authorities will, for the first time, be able to restrict bidding on certain contracts to businesses based in their communities or elsewhere in the UK. Ministers say the move will unlock growth, create skilled jobs and simplify access to public sector work for small and medium-sized enterprises.

The change involves disapplying a long-standing clause in the Local Government Act 1988 that prevented local authorities from favouring local suppliers. It brings town halls in line with Whitehall departments, which already have greater flexibility to use procurement to deliver social and economic value.

Chris Ward, Parliamentary Secretary at the Cabinet Office, said the reforms would “put power back in the hands of our communities,” adding:

“We’re changing the rules that have held back councils from investing in local businesses that are the lifeblood of local economies.”

Alison McGovern, Minister of State for Local Government and Homelessness, said the ability to prioritise local firms marked “a huge step forward”:

“This will mean more money going to businesses that know their areas best and can invest in the communities they serve.”

The move forms part of a wider overhaul of the public procurement regime aimed at opening up government work to SMEs and cutting commercial red tape.

It follows the publication of February’s National Procurement Policy Statement, which emphasises that public spending should generate wider social and economic value, including supporting local employment and improving skills.

Over the summer, ministers also consulted on proposals to use everyday public sector spending to create more opportunities for small businesses and social enterprises while strengthening local supply chains.

The reforms were welcomed by small business representatives, who have long argued that the procurement system was skewed in favour of large contractors.

Tina McKenzie, Policy Chair of the Federation of Small Businesses, called the move “exactly the kind of practical reform we called for”:

“Small firms bring deep local knowledge and strong community ties. When the system clears unnecessary hurdles and lets them compete on fair terms, the whole community benefits.”

Cllr Dan Swords, chair of the LGA’s Public Service Reform and Innovation Committee, said councils would now have greater freedom to “keep more of what they spend in their local communities”:

“Local suppliers, SMEs and voluntary organisations will all benefit, helping us boost inclusive local and national economic growth.”

The government stresses that core principles of fair competition and value for money will remain in place, but officials believe the reforms will give local authorities the flexibility needed to support economic recovery and resilience at a grassroots level.

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Councils handed new powers to ringfence £1bn in contracts for local small businesses

A third of Britain’s sole traders are still managing their finances with pen and paper, despite major changes to self-assessment rules coming into force this April, new research from Sage has revealed.

The study shows that many self-employed workers remain unprepared for Making Tax Digital for Income Tax — HMRC’s long-delayed overhaul of the self-assessment system that will require digital submission of tax returns for sole traders earning more than £50,000 a year.

Sage found that 66 per cent of sole traders still rely on outdated methods for financial admin, including spreadsheets (66 per cent), bank statements (56 per cent) and handwritten notes (33 per cent). Almost a quarter (23 per cent) spend more than six hours completing a single end-of-year return.

Alarmingly, 70 per cent remain unaware that they will be required to file returns digitally from April. Among those who do know about the change, almost four in ten (39 per cent) have taken no steps to prepare.

TV handyman Mark Millar, presenter of Channel 5’s Dream Kitchens and Bathrooms, said he recognised the pressures facing small business owners who try to juggle manual bookkeeping with their day-to-day work.

“Many sole traders I know are still using pencils and scraps of paper to keep tabs on their profit and loss,” he said. “That used to be me. I can remember the pressure I felt quoting, invoicing and managing clients, all while trying to stay on top of my tax returns. Making Tax Digital is an opportunity to make admin less time consuming and less stressful.”

Millar said switching to digital tools transformed the way he ran his construction company, offering clarity and reducing the risk of lost paperwork.

Research from Sage and the Association of Independent Professionals and the Self-Employed (IPSE) found that those already using digital accounting tools enjoy tangible improvements. More than half reported better organisation (54 per cent) and clearer financial visibility (53 per cent), while others said digital systems reduced stress and freed up time.

Neal Watkins, executive vice-president for small business at Sage, said the shift should ultimately make life easier for sole traders.

“As initiatives like Making Tax Digital continue to roll out, self-employed people have a real opportunity to turn compliance into an advantage — saving time, reducing admin and gaining a clearer view of their finances.”

The transition to digital tax filing marks one of the most significant administrative changes for self-employed workers in decades. While the government argues it will improve accuracy and reduce errors, the latest research suggests many sole traders are at risk of being caught off guard.

With millions of returns needing to move online over the coming years, accountants warn that those still relying on manual or paper-based systems could face unnecessary stress—and potential non-compliance—if they do not prepare soon.

Read more:
One in three sole traders still using pen and paper as digital tax deadline approaches

Small Business Britain has given a cautiously positive response to the Chancellor’s November 2025 Budget, saying the package provides “some relief” for small firms and signals a renewed focus on reducing living costs and supporting entrepreneurial growth.

Michelle Ovens CBE, CEO and Founder of Small Business Britain, said the Budget contained several welcome measures, particularly those aimed at strengthening the talent pipeline and easing cost pressures for SMEs.

“We were encouraged to hear about key initiatives, including free apprenticeship training for under-25s for SMEs, and are grateful for the Chancellor referencing Small Business Britain’s work in this,” she said. “We are excited to contribute to the Government’s review of how it can better back entrepreneurs.”

Ovens also welcomed further measures designed to support growth and investment, including a 40% first-year allowance for main rate assets and the decision to make business rates reductions permanent for more than 750,000 retail, hospitality and leisure businesses across the UK.

However, she acknowledged that some small firms will feel the impact of other policy changes, including the rise in the National Minimum Wage and higher dividend tax rates. Even so, she said these pressures may be offset by broader economic stabilisation.

“Some businesses will be affected by the rise to minimum wage, and entrepreneurs impacted by the increased dividends tax, but we hope these should be outweighed by the predicted stabilisation of the economy.”

Small Business Britain’s own data points to increasing consumer confidence ahead of the festive trading period. Research for Small Business Saturday on 6 December suggests UK consumers could spend over £23 billion this Christmas, with £5.3 billion, almost one-fifth, expected to go directly to small businesses. That represents a 19% increase on projected spending with small firms last year.

Ovens said the Chancellor was right to underline the importance of small firms in his speech.

“Overall, we believe businesses should face 2026 with confidence, and at Small Business Britain, we are here to ensure they do,” she said. “The UK’s 5.6 million small businesses play an indispensable role in driving Britain’s economy forward and creating jobs, and it was positive to hear this message reiterated at the opening of the Chancellor’s speech today.”

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Small Business Britain: Budget offers relief and growth opportunities, but challenges remain

After months of leaks, speculation and mixed signals about next week’s Budget, small business owners in Leeds West & Pudsey — the Chancellor’s own constituency — say they want one thing above all else: certainty.

Meeting with NotLtd just hours after it was confirmed that an income tax rise had been dropped, local entrepreneurs said they were still braced for new tax measures and fearful that small firms could once again be treated as “easy pickings”, as they felt they were in the Chancellor’s first Budget last October.

For Zulfi Hussain, owner of Deeva restaurant in Farsley and two more eateries across Leeds, last year’s employer National Insurance rise and minimum wage hike had “death sentence” consequences for smaller businesses. “Bigger organisations can ride out the storm,” he said. “But for some small businesses, it’s been devastating.” Hussain, who works closely with St Gemma’s Hospice, said charities and care organisations had also been hit hard.

Hussain worries Reeves may lower the VAT registration threshold, a move heavily rumoured in Whitehall. This year he bought a parade of independent shops in Farsley to prevent a supermarket takeover — but said a lower VAT threshold would force him, as landlord, to register for VAT and raise rents for tenants including a beauty salon and cake shop. What small businesses need, he said, is the opposite: “Increase the VAT threshold — even lower the VAT rate for hospitality, like they did during lockdown.”

Down the road, Ben Smith, who recently moved his mobile phone repair company onto Farsley high street, said his biggest concern is the Government scrapping small business rates relief. “It would put real pressure on us,” said Smith, who has repaired phones for 11 years. “We’ve taken a risk opening a shop, but we can’t absorb everything.”

In Pudsey, butcher Adrian Thorp, who recently opened Blake Henry’s with his son, is more sanguine. Having worked in Leeds Market all his life, he opened the business “for my son’s future” and now employs nine people. “You can’t have a free NHS and not pay taxes,” he said. But even he admits employer contributions and pension payments keep him “constantly busy”.

At Springfield Mills in Farsley — a former industrial site now home to dozens of artisan and tech businesses — The Marshmallowist co-founder Jenny Simms says last year’s employer NI increase directly halted expansion. “It meant the cost to us would be the equivalent of hiring two people instead of one,” she said. “So we didn’t do it.” She suggested a more targeted approach: “Maybe Amazon could pay a bit more,” she laughed. Simms also said childcare support remains a pressing issue for her mostly female workforce.

Tech entrepreneur Andy Kear, founder of Clockwork Creative Technology in Armley, wants greater clarity on R&D tax relief. His business writes software and runs servers for clients from West Yorkshire Police to national supermarket chains, yet he finds innovation support difficult to navigate. “It’s a very in-depth proposal. A bit more ease of use and clarity would be good,” he said. Beyond that, his message to Reeves is simple: “Leave us alone.”

Across Leeds West & Pudsey, sentiment was consistent: businesses feel strained by the last Budget’s surprise tax rises, anxious about the next round, and desperate for stability. Many say the Government should avoid further burdens on small firms and instead support the entrepreneurs expected to fuel the UK’s economic recovery.

Read more:
‘Leave us alone’: What small traders in Rachel Reeves’s constituency want from the Budget

Reform UK leader Nigel Farage has criticised reports that the Chancellor, Rachel Reeves, could cut the VAT registration threshold for businesses from £90,000 to as low as £30,000, warning that such a move would “punish small traders” and stifle growth.

Speaking at a business event in London on Monday, Farage argued that the threshold should instead be raised, suggesting a level between £160,000 and £180,000 to help small firms expand and hire more staff.

“The VAT threshold is far too low,” he said. “There are so many one or two-man bands that find themselves literally on that cusp. That’s why the argument for increasing the threshold makes sense. It’s a damn nuisance to a large number of people.”

Farage’s intervention comes amid reports that the Treasury is weighing changes to the VAT regime ahead of the Autumn Budget. The Daily Mail reported that Reeves was considering lowering the threshold, while earlier speculation in the summer suggested she could raise it in a pro-growth move, previously welcomed by the Office for Budget Responsibility when Jeremy Hunt was chancellor.

Farage also attacked the government’s reported plans for a so-called “exit tax” — a proposed levy on capital gains for business owners and entrepreneurs who relocate overseas. He said such measures risked driving investment and talent out of the UK.

The Reform UK leader also criticised the growing dominance of private equity in the British economy and called for renewed efforts to “boost UK capital markets,” including by scrapping stamp duty on shares to make Britain more competitive against international exchanges.

“We have to compete against other stock markets,” Farage said, adding that he would launch a working group aimed at ensuring small businesses had a stronger voice in government policy.

In his address to a room of small business owners, Farage accused successive governments of favouring large corporations through lobbying and political access.

“It’s the big businesses that take you to Wimbledon. It’s the big businesses that take people out for dinner,” he said. “Successive governments only listen to them.”

He criticised both the IR35 off-payroll working rules, introduced under the Conservatives, and Labour’s proposed workers’ rights reforms, arguing that both would place “crippling” burdens on company directors and small employers.

While Farage stopped short of outlining concrete tax proposals, he promised that Reform UK would release a set of detailed small business policies ahead of the next general election.

The event also came as JCB, the construction equipment giant owned by Lord Anthony Bamford, confirmed a £200,000 donation to Reform UK — its first official contribution to the party.

A JCB spokesperson said the company was supporting both the Conservatives and Reform because the two parties “believe in small business.”

Farage thanked Bamford for the donation, saying it reflected growing support among entrepreneurs and small firms for Reform’s campaign to “rebalance the economy away from corporate giants.”

Read more:
Nigel Farage urges government to raise VAT threshold to help small businesses

The National Theatre (NT) has unveiled a major expansion of its training opportunities for young creatives, launching three nationwide programmes aimed at tackling the UK’s growing backstage skills shortage.

The announcement coincides with Discover Creative Careers Month, which runs throughout November, and marks the latest step in the NT’s drive to open up pathways into the arts for people from all backgrounds.

Through the National Theatre Skills Centre, supported by Bank of America, the organisation has opened applications for a new Introduction to Stage Design course, alongside the return of its successful Nationwide Young Technicians and How to Be a Producer programmes.

Together, the initiatives will provide hands-on training, mentorship, and industry insight for young people aged between 14 and 25, helping them gain a foothold in backstage and production roles — from lighting and set design to producing and project management.

Participants will work with leading industry figures including award-winning stage designer Georgia Lowe and producer Ellie Keel, gaining direct experience of how theatre productions come together.

The launch comes amid growing concern about a shortfall in creative sector skills, with 65% of vacancies now classed as hard to fill — far higher than the 41% average across other sectors, according to Skills England.

Government-commissioned research found that although nearly a third of young people aspire to work in the creative industries, almost half are unsure of the skills or qualifications required — a situation worsened by declining Drama GCSE and A-Level participation.

The National Theatre Skills Centre, established with support from Bank of America, aims to bridge that gap. In the past year alone, it has provided training and development opportunities for over 4,800 young people nationwide.

As part of the national initiative, the NT will also host a Careers Day on 27 November for more than 100 secondary school students from across Greater London. The event will include workshops in stage management and behind-the-scenes tours to showcase the teamwork and artistry that underpin world-class theatre.

Kate Varah, Executive Director and Co-Chief Executive of the National Theatre, said the new programmes reflect the NT’s commitment to ensuring theatre remains a thriving, inclusive industry.

“The true craft of a performance goes far beyond what we see on stage,” Varah said. “With so many young people eager to work in the creative industries but struggling to find entry routes, our programmes are essential to sustaining the future workforce that underpins the UK’s global reputation for theatre excellence.”

Culture Secretary Lisa Nandy welcomed the initiative, saying the government would continue to work with cultural organisations to expand access to creative careers.

“We must nurture a new generation of talent by breaking down barriers and countering misconceptions about creative jobs,” she said.

Bernie Mensah, President of International at Bank of America, added that collaboration between business and the arts was vital to fostering innovation and opportunity.

“When public and private organisations work together, we unlock not only creative potential but also drive economic and social mobility,” he said.

Programme details and how to apply

Introduction to Stage Design (14 Feb – 28 Mar 2026): A new course for 16–19-year-olds, supported by The Linbury Trust, covering set and costume design through practical workshops and masterclasses. The programme culminates in an exhibition at the NT’s Wolfson Gallery.
Nationwide Young Technicians (13 Jan – 24 Mar 2026): Weekly online sessions for 14–18-year-olds exploring the wide range of technical and backstage roles in theatre, led by experienced professionals.
How to Be a Producer (16–20 Feb 2026): A week-long intensive at the National Theatre Studio for 18–25-year-olds, led by producer Ellie Keel, covering key skills such as budgeting, marketing and project management.

Applications for all three programmes close at 10am on 1 December 2025. To apply please visit the NT website.

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National Theatre launches new training drive to nurture next generation of backstage talent

Chancellor Rachel Reeves is facing a backlash from business groups and freelancers over reported plans for a £6 billion income tax rise, which they warn would “hammer the self-employed” and discourage entrepreneurship.

The proposals, understood to be under consideration for next month’s Budget, would involve cutting 2p from employee National Insurance contributions (NICs) and adding the same amount to income tax rates. The change would hit pensioners, landlords and self-employed workers, who do not pay employee or employer NICs, but would see their income tax bills rise.

The plan, first floated by the Resolution Foundation, a think tank formerly led by Torsten Bell, now a Treasury minister, is designed to help close the fiscal gap by broadening the tax base. It argues that the self-employed enjoy a relative advantage in the current system because they do not pay employer NICs.

However, the Association of Independent Professionals and the Self Employed (IPSE) said such a move would punish Britain’s freelancers and undermine a sector already hit by rising costs and tighter regulation.

“We’re concerned by reports that government might be considering this. It would be a tax hike on the self-employed, and a tax hike on working people,” said Fred Hicks, senior policy manager at IPSE.

“Self-employment is inherently more risky than regular employment. If government chips away at the incentive to take on that risk, we’ll have fewer people daring to strike out on their own, working as freelancers and filling a pool of flexible talent for employers to tap into.”

Hicks warned that the 350,000 people who became self-employed in the past year could “have the rug pulled from under their plans” if Reeves presses ahead with the reform, adding that many might “abandon self-employment before they really find their feet”.

The proposal has also drawn criticism from economists and opposition MPs, who argue that raising taxes in a fragile labour market could stifle growth.

Stephen Evans, chief executive of the Learning and Work Institute, said: “The concern with any form of tax rise that affects employment at the moment is that it risks being the straw that breaks the camel’s back. You’ve got tough times — the minimum wage rising, employer NICs up, and the employment rights bill going through. There’s a question whether this is economically the right time to do it, even if it’s fiscally attractive.”

The UK’s self-employed population fell sharply from five million before the pandemic to under 4.2 million in 2022, according to the Office for National Statistics (ONS). Although it has since climbed back to 4.4 million, analysts say the sector remains vulnerable to policy shocks.

Andrew Griffith, the shadow business secretary, described the plan as another “stealth tax” on Britain’s freelancers.

“This would be another stealth tax on the self-employed — an endangered species whom many feel HMRC is already hunting to extinction,” he said. “Instead of ideas to raise taxes, why don’t the Resolution Foundation put on their thinking caps to cut wasteful spending?”

A Treasury spokesperson declined to comment directly on the reports, saying only: “We do not comment on speculation around future changes to tax policy outside of fiscal events.”

The proposals, if implemented, could prove politically fraught for Reeves, who has repeatedly pledged that Labour will “protect working people” from higher taxes. Critics argue that any move to increase income tax rates would breach that manifesto promise, while further undermining confidence among Britain’s small business owners.

With unemployment rising and growth faltering, the Chancellor faces a difficult balancing act — closing a £30 billion fiscal gap without damaging the very segment of the workforce that Labour has promised to champion.

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Income tax raid ‘would hammer the self-employed’, warns industry body

Britain’s self-employed workers are losing the equivalent of 17 hours a month, or more than five working weeks a year, to business admin tasks, time that could otherwise generate an extra £3,000 annually, according to new research commissioned by Virgin Money.

The survey of 500 self-employed workers and small business owners found that nearly half (45%) “dread” tax return season and put it off for as long as possible. Over half (53%) said it was the most stressful time of the year, while almost half (49%) agreed their quality of life would improve if business admin were easier to manage.

Managing client communications, logging receipts and expenses, and filing tax returns were cited as the biggest time drains.

The findings highlight the scale of the challenge facing small business owners as the government prepares to implement its Making Tax Digital (MTD) initiative next April.

More than one in five (21%) respondents said they had missed collecting a payment from a client because of admin overload, while 16% admitted they had failed to pay a supplier on time due to paperwork piling up.

Nearly half (47%) said they still used their personal current account for both business and personal finances, while 57% did not use any accounting software or apps to manage their finances.

“Doing your tax return doesn’t have to be daunting, but our research shows it’s a real headache,” said Simon Norman, Head of Business Banking at Virgin Money. “Many see tax admin as the biggest stress of their jobs. Government changes are on the way, so it’s important those affected are aware of what’s coming and are ready for a smooth switch to digital tax returns.”

The poll found widespread unawareness of the upcoming MTD changes. From April 2026, self-employed people earning more than £50,000 will be required to switch to digital-only tax returns, with those earning over £30,000 following in 2027.

Nearly half (45%) of respondents said they were unaware of the new rules, and 63% did not realise they would need to submit quarterly updates on their income.

In response, Virgin Money is offering six months’ free access to accounting software Xero for customers of its M Account for Business, a Moneyfacts five-star-rated online business bank account with no monthly fee and 0.25% cashback on all debit card purchases.

“It’s essential self-employed people prepare now so digital-only returns don’t come as a shock,” Norman added. “Having a dedicated business account and the right tools can make the process smoother and save time that could be spent growing their business.”

The study also found that 45% of respondents consider business admin the worst part of being their own boss, and more than a fifth (22%) have considered returning to employment to escape it.

As Britain’s 4.3 million self-employed workers navigate the digital transition, the findings underscore the need for greater support to help them balance compliance with productivity — and ensure that admin doesn’t continue to eat into both their time and income.

Would you like me to create a shorter online version (around 450 words) optimised for Business Matters Online, with a stronger focus on Making Tax Digital, financial technology, and the economic impact on sole traders?

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Self-employed workers lose 17 hours a month to business admin, new study reveals

MPs have urged the Chancellor, Rachel Reeves, to ignore “scaremongering” by gambling companies and push ahead with higher taxes on the most harmful products, as pressure mounts on the Treasury to extract more from the £11 billion industry ahead of this month’s Budget.

In a report published on Thursday, the Treasury select committee accused betting firms of hiding their most “insidious” and addictive products behind the veneer of traditional, lower-risk activities such as horse racing and seaside amusements. The committee said the Chancellor should focus new duties on high-street slot machines and online casino games, both of which have seen rapid growth since the pandemic.

The recommendations come as Reeves’s team finalises the 26 November Budget, with Treasury officials still weighing whether to harmonise gambling tax rates or target specific sectors. According to industry sources, the Chancellor is likely to favour a moderate rise, expected to raise between £1 billion and £1.5 billion, but she faces mounting political pressure to go further.

Calls for a tougher regime echo similar proposals from former prime minister Gordon Brown, who has backed a £3 billion increase in gambling duties to help fund the removal of the two-child benefit cap, and from influential thinktanks such as the Social Market Foundation (SMF) and IPPR.

The MPs’ report also criticised the Betting & Gaming Council (BGC) after its chief executive, Grainne Hurst, denied in a recent evidence session that gambling causes social harm — a moment the committee chair, Meg Hillier, described as “extraordinary”.

“You feel a moment in a room sometimes where everyone’s jaw drops,” Hillier said. “A couple of us pushed to ask if she was sure she was saying that. But she doubled down.”

The report linked the level of taxation directly to the risk of addiction, calling on the Treasury to adopt a more nuanced system that reflects the differing levels of harm across gambling products.

Currently, multiple duties apply to different types of gambling. Bets on horse racing and sports fall under general betting duty, levied at 15%, while casinos pay gaming duty ranging from 15% to 50%. Remote gaming duty, which covers online casino games, is charged at 21%, and machine gaming duty — governing high-street slot machines — sits at 20% for the most popular machines.

The Treasury has been considering whether to simplify and merge these rates, but the committee said doing so would be a mistake. Instead, MPs argued for higher taxes on the most addictive forms of play, a stance supported by both the SMF and IPPR.

Gambling firms have strongly opposed the prospect of new levies, warning that higher taxes could drive punters to unregulated black-market websites. The BGC claimed that a tax raid could ultimately reduce Treasury revenues and harm British sport, which relies on the sector’s sponsorship and funding.

The council has also cited a report by EY, commissioned by the industry, claiming that steep tax increases could cost 40,000 jobs and cut £3.1 billion from the economy. Betting chain Betfred, owned by former Tory donor Fred Done, has warned that it could close all of its 1,287 UK shops if taxes rise sharply.

However, the Treasury committee’s report questioned these claims, citing evidence from the SMF suggesting no strong link between higher duty rates and illicit gambling activity in international markets.

For Reeves, the decision on whether to target the gambling sector will be both fiscal and political. Labour’s manifesto commits to “protecting working people” while ensuring those with the “broadest shoulders” contribute more — a promise that leaves gambling, alcohol and other “sin” industries in the government’s crosshairs as potential sources of revenue.

With her second Budget less than three weeks away, Reeves faces a delicate balancing act: raising billions to stabilise the public finances without triggering job losses or backlash from industries already under pressure.

Read more:
MPs urge Reeves to raise gambling taxes despite industry ‘scaremongering’

The Bank of England has voted narrowly to hold interest rates at 4%, pausing further cuts amid stubborn inflation and growing uncertainty ahead of Chancellor Rachel Reeves’ pivotal Budget later this month.

In a closely split decision, the Monetary Policy Committee (MPC) voted 5–4 to maintain the current rate, with Governor Andrew Bailey casting the deciding vote. Bailey said he would “prefer to wait” before supporting any further loosening of monetary policy, citing ongoing concerns about inflation expectations among households and elevated wage growth.

The Bank expects inflation to remain above its 2% target until the second quarter of 2027, forecasting a gradual decline from its current 3.8% level. Officials said consumer price inflation had “peaked” but warned that persistent price pressures — particularly in services and food — continued to pose risks.

In its latest economic outlook, the Bank maintained its growth forecast of 1.4% for both 2025 and 2026, revising up the current year slightly but lowering next year’s estimate amid weakening demand and a slowing labour market.

Some members of the MPC highlighted evidence of a cooling jobs market and falling vacancies, which could reduce inflationary pressures. Others, however, warned that wage growth of 4.9% in the three months to August was still too high to justify immediate cuts.

Bailey said that while inflation risks were “less pressing” than in August, the case for easing policy had not yet been proven.

“Upside risks to inflation have become less pressing since August, and I see further policy easing if disinflation becomes more clearly established in the period ahead,” he said. “Rather than cutting Bank Rate now, I would prefer to wait and see if the durability in disinflation is confirmed in upcoming economic developments this year.”

The Bank’s statement dropped the word “careful” from its policy guidance, describing instead a “gradual path downwards” for rates — a subtle but significant signal that a series of cuts could follow in 2026 if inflation continues to ease.

The decision comes as markets await Reeves’ 26 November Budget, expected to include new tax rises to fund public spending and reduce borrowing. The Chancellor has hinted that “all must contribute” to restoring fiscal health — a departure from earlier pledges that only those with “the broadest shoulders” would face higher taxes.

Economists say any income tax increases announced later this month could be disinflationary, reducing consumer spending power and potentially allowing the Bank to cut rates sooner in 2026. However, uncertainty over fiscal policy — and the size of a reported £30 billion funding gap — is prompting the MPC to keep its options open.

The Bank also noted that last year’s £25 billion increase in employers’ national insurance contributions (NICs) had fed through to higher supermarket prices, with food inflation expected to reach 5.3% by year-end. Officials said the impact of those changes was now largely absorbed by consumers.

Economists were divided on the Bank’s decision. William Ellis, senior economist at the IPPR, said the MPC had missed an opportunity to support growth.

“Monetary policy remains tight, and the Bank should have gone further today by cutting rates to support the economy,” he said. “With inflation flat, sluggish growth, and a cooling labour market, the case for easing is clear.”

Daniel Austin, CEO and co-founder of ASK Partners, said the decision reflected a cautious stance amid global volatility and fiscal uncertainty.

“With the Autumn Statement approaching and policy in flux, it’s little surprise the MPC has held rates at 4%,” he said. “High fixed-rate mortgages mean meaningful relief for homeowners remains distant. In property, the decision reinforces a ‘wait and see’ mood — with buyers pausing and developers holding back.”

Austin added that while easing planning rules and offering temporary levy relief could help restart stalled housing projects, “a clear, sustained fall in inflation remains key to unlocking broader investment”.

Despite signs of progress on inflation, the Bank’s latest move underscores a fragile recovery. A combination of high borrowing costs, weak productivity growth, and looming fiscal tightening has kept confidence muted across households and businesses alike.

With both the Bank of England and the Treasury facing competing pressures — to tame inflation without choking growth — the next few months could prove decisive in shaping Britain’s economic trajectory into 2026.

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Bank of England holds interest rates at 4% as Rachel Reeves’ Budget looms

Wealthy Britons are moving unprecedented sums into offshore bonds as they brace for higher taxes and seek more flexible ways to manage their wealth.

According to data reviewed by the Financial Times, around £10.5 billion was invested in offshore bonds in the 12 months to June, more than double the £5.1 billion recorded the previous year — marking a record-breaking surge in demand for overseas investment wrappers.

Financial advisers say the trend reflects the growing unease among higher earners over the UK’s increasingly complex tax landscape, with Ireland, Luxembourg, and the Isle of Man emerging as the most popular jurisdictions for new bond purchases.

The shift comes as the government continues to freeze income tax thresholds and reduce tax-free allowances, pulling more middle and high earners into higher tax bands.

At the same time, capital gains tax (CGT) for those in higher and additional rate brackets has risen from 20% to 24%, while the annual CGT exemption has been slashed from £12,300 to just £3,000 over two years. From 2027, some pension pots will also fall within the scope of inheritance tax.

With the Autumn Budget on 26 November expected to deliver fresh measures targeting “those with the broadest shoulders,” wealth managers report that clients are increasingly looking to defer or mitigate future tax liabilities through offshore structures.

“Some investors may be concerned about potential tax increases in the UK,” said Claire Trott, head of retirement and holistic planning at St James’s Place. “Offshore bond funds allow tax to be deferred while the investment remains within the bond. For others, it may reflect longer-term plans to relocate overseas.”

An offshore bond is structured as a life insurance policy that allows investors to roll up investment returns without paying tax until funds are withdrawn. Holders can typically withdraw up to 5% of the original investment each year for 20 years, tax-free — an attractive feature for those seeking income flexibility.

Tax is only due when withdrawals exceed the cumulative 5% allowance or when the bond is fully encashed. For retirees or those planning to access funds at a time when their income is lower, this deferral can lead to substantial tax savings.

Offshore bonds can also serve as a succession planning tool, enabling investors to transfer wealth to family members — such as children or grandchildren — who may face lower tax rates when the funds are realised.

However, experts warn that while offshore bonds can offer legitimate tax planning advantages, they are not without complexity or risk.

“Offshore bonds are being heavily marketed by some firms, but investors should be cautious,” said Helen McGhee, tax partner at Joseph Hage Aaronson & Bremen. “In most cases they don’t eliminate tax — they defer it — and that deferral can be compromised in certain circumstances.”

McGhee added that HM Revenue & Customs is already paying close attention to the surge in offshore bond activity. Under the Personal Portfolio Bond rules, investors could face an unexpected tax charge if their holdings are deemed too tailored or if benefits are taken prematurely.

“With increasing popularity comes increasing scrutiny from HMRC,” she said. “Investors must ensure their structures are compliant — or risk losing the advantages they were hoping to gain.”

For now, the surge into offshore bonds underscores how Britain’s affluent investors are adapting to a shifting fiscal landscape, seeking ways to protect their capital amid rising taxes and political uncertainty.

Yet with HMRC’s gaze sharpening and regulatory complexity deepening, the appeal of offshore bonds may ultimately hinge less on secrecy — and more on sound, transparent financial planning.

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Wealthy investors pour record sums into offshore bonds amid rising UK tax burden

Sir Charlie Mayfield says ill-health is driving millions out of work, costing employers and the economy billions — but the problem is “not inevitable.”

Britain is at risk of an “economic inactivity crisis” as the number of sick and disabled people out of work continues to rise, according to a government-commissioned review led by Sir Charlie Mayfield, the former John Lewis chairman.

The report warns that 800,000 more people are now out of work due to health conditions than in 2019, costing employers £85 billion a year in lost productivity, sick pay and staff turnover. Without intervention, a further 600,000 workers could leave the labour market by 2030.

“This is not inevitable,” Sir Charlie said, as he launched a new taskforce aimed at helping people return to work and tackling what he described as a “vicious cycle” of poor health and economic inactivity.

The report, commissioned by the Department for Work and Pensions (DWP) but produced independently, found that one in five working-age people is now out of work and not seeking employment — a major reversal after decades of improving participation.

Sir Charlie said sickness is costing the UK far more than just business losses.

“Work is generally good for health, and health is good for work,” he said. “For employers, sickness and staff turnover bring disruption and lost experience. For the country, it means weaker growth, higher welfare spending and greater pressure on the NHS.”

According to some estimates, illness-related inactivity costs the wider economy £212 billion a year — almost 70% of annual income tax receipts — through lost output, welfare payments and additional healthcare costs.

The Office for Budget Responsibility (OBR) expects spending on health and disability benefits for working-age people alone to reach £72.3 billion by 2029–30.

Mayfield said the surge was being fuelled by a “sharp rise” in mental health conditions among younger workers and chronic musculoskeletal problems — such as back pain and joint issues — among older staff.

His taskforce will also work with GPs, who he said often face pressure from patients to issue sick notes but find it difficult to assess whether someone could work in a modified role.

Business groups broadly welcomed the taskforce but warned that parts of Labour’s Employment Rights Bill risk discouraging firms from hiring people with existing health conditions.

The Bill includes guaranteed hours and restrictions on zero-hours contracts — measures that some retailers fear will make flexible hiring harder.

Helen Dickinson, chief executive of the British Retail Consortium, said retailers were committed to supporting employees with ill-health but that “the government’s goals and policies are at odds with one another.”

“While encouraging employers to invest in workforce health and provide flexibility, they risk making it more difficult,” she said.

In response to the report, the government announced a partnership with over 60 major employers, including Tesco, Google UK, Nando’s and John Lewis, to test new health and wellbeing initiatives aimed at reducing sickness absence and improving return-to-work rates.

Over the next three years, these programmes will form the basis for a voluntary national workplace health standard, expected by 2029.

Work and Pensions Secretary Pat McFadden said the partnership was “a win-win for employees and employers.”

“This is about keeping good, experienced staff in work and supporting people to stay healthy for longer,” he said.

Ruth Curtice, chief executive of the Resolution Foundation, said the review “accurately identified a culture of fear, a dearth of support and structural barriers to work” as key issues behind Britain’s worsening inactivity rate.

The CIPD, representing HR professionals, welcomed the focus on prevention. Its chief executive, Peter Cheese, said the report’s success “will depend on how well its recommendations are understood by business and backed by national and regional policymakers.”

Dr Roman Raczka, president of the British Psychological Society, said the shift toward “rehumanising the workplace” was overdue, but warned that not everyone could or should return to work.

“The workplace itself can be a root cause of poor mental health,” he said. “Those signed off sick deserve timely access to safe, compassionate care.”

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Ex-John Lewis boss warns UK faces £85bn sickness bill and economic crisis