Month: October 2024

With the Labour government set to present its first budget on 30 October, anticipation is mounting as businesses and individuals alike brace for potential tax changes and spending shifts.
Chancellor Rachel Reeves has made it clear that tax hikes are inevitable, framing them as necessary for restoring fiscal and economic stability. In her address at the government’s investment summit earlier this week, Reeves underscored the importance of this stability as a precursor to investment, signalling that businesses understand the need for such measures to “balance the books.”
While Labour pledged not to raise key taxes affecting working people, such as income tax, VAT, and personal national insurance contributions, the party left the door open to raising employers’ national insurance contributions, capital gains tax (CGT), and other levies, including those on the gambling sector. The rumoured changes have already sparked concern among some industries, with UK-based bookmakers seeing their shares fall following reports of potential tax increases of up to £3 billion in the upcoming budget.
Meanwhile, Prime Minister Sir Keir Starmer has sought to calm nerves, dismissing speculation that CGT could rise to 39% as “wide of the mark,” but confirmed that tax increases would be part of the plan to restore the UK’s economic footing. This comes against a backdrop of criticism from the business community regarding Labour’s handling of the economic legacy left by the previous Conservative government, with claims of a £22 billion fiscal deficit requiring “difficult decisions.”
Here’s a breakdown of the possible changes that Chancellor Reeves could announce in the Autumn Budget 2024:
Employers’ national insurance contributions
One of the most significant potential measures is a rise in employers’ national insurance contributions (NICs). Although Labour ruled out increasing NICs for employees in their election manifesto, they did not extend this promise to employers. Jonathan Reynolds, the business secretary, hinted at this possibility, stating that raising employers’ NICs could be a viable way to boost Treasury revenue without directly impacting workers.
A one percentage point increase in employers’ NICs could raise approximately £8.9 billion a year, offering a substantial boost to government finances as it seeks to plug the fiscal gap. However, this move could face opposition from businesses already struggling with higher costs amid inflation and rising interest rates.
Capital gains tax
Capital gains tax (CGT) is another area under scrutiny. Although Starmer has played down the likelihood of CGT rising as high as 39%, the chancellor may still look to increase CGT rates to bring them more in line with income tax rates, or expand the range of assets subject to CGT. Currently, CGT is levied at 10% for basic-rate taxpayers and 20% for higher-rate taxpayers, with a higher rate applied to property transactions.
Increasing CGT could raise significant revenue, but it also risks disincentivising investment in the UK, particularly in the tech and start-up sectors, which rely heavily on capital investment. Some investors have already accelerated plans to sell their businesses ahead of potential tax increases, highlighting the uncertainty surrounding this issue.
Non-domiciled tax status
The controversial non-domiciled tax status, which exempts foreign-earned income from UK taxation, is also on the table. While Labour has previously criticised the system for allowing wealthy individuals to avoid UK taxes, there are concerns that changing this status could deter high-net-worth individuals and businesses from locating in the UK.
Billionaire John Caudwell, a former Tory donor who switched to supporting Labour, warned against drastic changes to the non-dom tax regime, cautioning that it could harm the UK’s ability to attract wealthy investors. Any changes to this tax status would need to be carefully balanced to avoid negative impacts on inward investment.
Income tax thresholds
Although the chancellor is unlikely to raise income tax rates, she could lower the thresholds at which the various tax bands kick in. Currently, individuals pay 20%, 40%, and 45% income tax depending on their earnings, but reducing the thresholds would bring more people into the higher tax brackets.
This move would allow the Treasury to increase revenue without breaking Labour’s promise not to raise income tax rates. According to the Institute for Fiscal Studies (IFS), reducing the personal allowance or the basic-rate limit by 10% could generate an additional £10 billion and £6 billion, respectively, in annual revenue. However, this approach would still feel like a tax hike to many, as it would effectively increase the tax burden on middle-income earners.
Pensions
Reeves is expected to back away from earlier plans to cut tax relief on pension savings, following warnings that such a move would disproportionately affect public sector workers, including teachers and nurses. Currently, pension contributions are eligible for tax relief at the saver’s marginal rate of income tax, meaning higher earners receive 40% or 45% relief on contributions.
While reducing pension tax relief could potentially raise billions, it would risk alienating a key section of the electorate and sparking backlash from unions and public sector organisations. As a result, it seems likely that the chancellor will avoid making significant changes in this area for now.
Inheritance tax
Inheritance tax (IHT) is another area where Reeves may introduce reforms. While IHT currently applies to only around 4% of estates, it is often viewed as an unfair form of double taxation. Labour could look to increase revenue from IHT by removing exemptions for business and agricultural assets, which are currently passed on tax-free.
A cap on these exemptions, or their abolition altogether, could raise around £2 billion annually, according to the IFS. Other potential changes include closing loopholes that allow wealthy individuals to avoid CGT when passing on estates to their heirs, which could generate additional funds for the Treasury.
Fuel duty
Reeves may break with the Conservative tradition of freezing fuel duty, which has been in place since 2011. Increasing fuel duty could raise an additional £6 billion a year, which would provide a significant revenue boost at a time when the government is looking to close the fiscal deficit. This move could also help steer motorists towards more environmentally friendly vehicles, aligning with Labour’s green agenda.
Private equity profits
The taxation of private equity profits, particularly carried interest, has long been a contentious issue. Currently, carried interest is taxed as capital gains rather than income, meaning private equity executives benefit from lower tax rates. Increasing the tax rate on carried interest to match income tax rates could raise an additional £2 billion in revenue, though it could also lead to behavioural changes that reduce the overall tax take.
Gambling taxes
Reports that the government is considering raising taxes on UK-based gambling companies by as much as £3 billion have already shaken the markets. While Labour may see the sector as a potential source of significant revenue, there are concerns that such a move could harm the industry and lead to job losses.
Other tax options
Reeves has ruled out a wealth tax, despite pressure from trade unions to introduce one. However, the chancellor may introduce a new tax modelled on the health and social care levy introduced by Boris Johnson’s government in 2021. Such a levy could provide a new revenue stream without breaching Labour’s promises on income tax, VAT, or personal national insurance contributions.
Fiscal rules
The chancellor may also tweak the fiscal rules to create more room for public investment. By adopting alternative debt measures, such as public sector net worth (PWNW) or public sector net financial liabilities (PSNFL), Reeves could increase fiscal headroom by as much as £60 billion, providing additional funds for infrastructure and public services.
Read more:
October budget 2024 predictions: what Rachel Reeves could announce

Investment in UK start-ups has hit its lowest level in six years, highlighting the growing challenge for the government in stimulating economic growth.
In the three months to September, there were just 32 fundraising rounds for early-stage businesses, down from 75 in the previous quarter, according to data provided to The Times.
A study commissioned by VenturePath, an investor group focused on early-stage companies, revealed that UK start-ups raised £162 million by issuing shares to external investors during this period. This is the lowest quarterly figure recorded in at least six years. Despite the drop in the number of funding rounds, the average amount raised in so-called Class A funding rounds rose to over £5 million, compared to £4.2 million in the previous quarter.
The research, conducted by Beauhurst, a firm that monitors private company activity, suggested that the UK is struggling to scale businesses beyond the start-up phase, which could hinder broader economic growth. Rachel Reeves has committed to leading the most pro-growth Treasury in the nation’s history, with a focus on boosting the UK’s GDP growth to the highest in the G7.
With the Autumn Budget on the horizon, Chancellor Rachel Reeves is expected to implement tax hikes and cut public spending by £40 billion, reallocating funds within various departments. However, the UK’s growth prospects remain hampered by slow productivity and a lack of investment since the 2008 financial crisis, with further constraints on early-stage funding potentially stifling innovation and technological progress.
Michael Moore, CEO of the British Private Equity and Venture Capital Association, stated: “We urgently need to inject substantial new capital into the venture capital funds that support the innovative businesses that will drive the British economy forward.”
Julian David, CEO of techUK, added: “These businesses play a critical role in helping the UK government achieve its strategic goals by offering innovative solutions to some of the country’s most pressing challenges.”
Read more:
Funding for UK start-ups falls to six-year low as investment slows

The UK tech industry is on edge as speculation mounts over potential changes to Capital Gains Tax (CGT) in the upcoming Autumn Budget.
Leading audit and advisory firm Blick Rothenberg has expressed concerns that such changes could have a detrimental impact on the fintech ecosystem, a key driver of the UK’s global tech reputation.
Simon Gleeson, a partner at the firm, commented: “This week has been turbulent for the UK tech sector. Keir Starmer’s ambiguous stance on potential tax rises, as hinted by Rachel Reeves at the International Investment Summit 2024 in London, has only heightened uncertainty.”
A letter signed by 66 fintech leaders, warning of a potential exodus if CGT increases, has added to the growing anxiety. Gleeson noted that some employees at Monzo are reportedly looking to cash out before the budget, fearing higher tax rates.
He added: “Start-ups and founders, known for their resilience and vision, may face what feels like punitive measures if taxed more heavily for long-term rewards. Such changes risk sending negative signals to international investors, undermining the UK’s appeal as a hub for talent and innovation.”
Despite the uncertainty, the government announced a positive note at the summit, highlighting £63 billion in new investment and 38,000 job creations. However, the upcoming Budget remains a significant source of apprehension.
Read more:
Capital Gains Tax concerns loom over UK tech sector ahead of Autumn Budget

Investors are withdrawing money from their pension pots in increasing numbers, fearing potential tax rises in the upcoming budget.
AJ Bell, one of the UK’s largest DIY wealth managers, has reported a significant uptick in pension withdrawals, as clients move to secure tax-free lump sums ahead of possible changes by the government.
Michael Summersgill, AJ Bell’s chief executive, noted “a noticeable change in both customer contributions to pensions and tax-free cash withdrawals” as speculation grows that Chancellor Rachel Reeves may reduce the current tax-free limit. Under existing rules, savers aged 55 and over can withdraw up to 25% of their pensions tax-free, with a cap set at £268,275. However, rumours of a lower cap have led many clients to cash in on this allowance before the October 30 budget.
In addition to increased withdrawals, some customers are accelerating pension contributions amid concerns that the government may alter tax relief on pensions. “Many are taking advantage of the current system before potential changes come into effect,” an AJ Bell spokesman said.
Despite the changing customer behaviour, Summersgill insisted that the shifts do not materially impact AJ Bell’s overall performance but warned that “these are significant decisions for individual customers.” He called on the Treasury to implement a “pension tax lock” in the budget to ensure stability in pension tax legislation for the remainder of this parliament.
The uncertainty surrounding the budget has also affected other investment platforms. Vanguard has reported a surge in customers making full use of their tax-free allowances in Isas and self-invested personal pensions (Sipps), as investors seek to safeguard their savings from potential tax hikes.
The mounting speculation of tax increases comes as Labour prepares to deliver its first budget since taking office in July. Both Reeves and Sir Keir Starmer have warned of “difficult decisions” ahead to fill a gap in public finances, with expectations that higher earners may face additional burdens.
AJ Bell’s core platform business, which allows individuals to manage investments, shares, Sipps, and Isas, has continued to grow despite the tax anxieties. The platform attracted 66,000 new customers in the year to September 30, taking its total client base to 542,000. This growth helped drive a 22% increase in assets under administration, reaching a record £86.5 billion.
AJ Bell’s smaller investment management division also saw substantial growth, with assets under management rising by 45% to £6.8 billion over the past 12 months. Analysts at Jefferies described the company’s fourth quarter performance as “solid,” although shares in AJ Bell dipped by 5p, or 1%, to 476p following the trading update.
As the budget approaches, the financial sector remains on edge, with investors closely watching for any changes that could affect their pensions and savings.
Read more:
Investors rush to withdraw pension funds amid fears of tax hikes in upcoming budget

UK retail sales rose unexpectedly in September, defying analyst predictions of a contraction, as consumers increased spending on technology despite impending tax rises and economic uncertainties.
According to the Office for National Statistics (ONS), retail transactions grew by 0.3% in September, building on a strong 1% increase in August. Analysts had forecast a 0.4% decline for the month.
While technology equipment saw strong sales, supermarket spending faltered, with consumers cutting back on luxury food items amidst concerns about rising costs. Retail sales are still 0.2% lower than pre-pandemic levels, highlighting the ongoing challenges faced by the sector.
Over the three months to September, sales increased by 1.9%, the joint largest quarterly rise since July 2021. Hannah Finselbach, a senior statistician at the ONS, noted: “Tech stores reported a notable rise in sales, which offset weaker performance in supermarkets due to bad weather and cautious consumer spending on luxury items.”
Consumer Confidence and Spending Patterns
Erin Brookes, European retail and consumer lead at Alvarez & Marsal, attributed the growth to factors such as record rainfall and early winter chills, which boosted demand for warm clothing. “While consumers remain cost-conscious, budgets are somewhat less strained than they were a year ago,” Brookes noted, though she warned that uncertainty ahead of the autumn budget could impact consumer confidence.
Oliver Vernon-Harcourt, head of retail at Deloitte, pointed out a “back-to-school boost” in September, with strong sales of computers, clothing, and footwear. However, he cautioned that consumers were still holding back on big-ticket purchases, while sales of smaller non-essential items helped to prop up sales values.
Looking Ahead to the Autumn Budget
The rise in retail spending comes in the lead-up to Chancellor Rachel Reeves’s first budget on October 30, where tax increases and spending cuts amounting to £40 billion are expected. Reeves and Labour leader Sir Keir Starmer have defended the need for “tough decisions” to counter higher-than-anticipated in-year spending inherited from the previous Conservative government. Their remarks have sparked concerns among consumers and businesses about the potential economic impact.
Consumer confidence has already shown signs of fragility. The GfK consumer confidence index dropped to minus 20 in September, down from minus 13 the previous month, reflecting growing concerns about the cost-of-living crisis and the anticipated measures in the upcoming budget.
Potential for Future Growth
Despite current concerns, the economic outlook could improve further in the coming months, which may support retail growth. The Bank of England is expected to cut interest rates by 25 basis points in both November and December, bringing the base rate down to 4.5%. This follows a drop in inflation to a three-year low of 1.7% in September, which has helped ease pressure on household budgets.
With wage growth remaining robust at over 4%, surpassing inflation, households’ living standards are gradually improving. However, many consumers have increased their savings in the post-pandemic period, potentially limiting demand for discretionary spending. How this balance between cautious saving and improving wages will play out for retailers remains to be seen as the year draws to a close.
Read more:
UK retail sales rise unexpectedly in September despite economic uncertainties

In a sharp escalation of tensions between Brussels and Elon Musk, one of the European Union’s top officials, Věra Jourová, has branded the billionaire tech entrepreneur a “promoter of evil” over his handling of X, formerly known as Twitter.
Jourová, who oversees the EU’s efforts against online misinformation and hate speech, accused Musk of enabling the spread of harmful content, including antisemitism, on the social media platform.
Ms Jourová, who has served as the EU’s vice president for values and transparency, made her comments as she prepares to leave Brussels after a five-year term. Speaking to Politico, she stated, “We started to relativise evil, and he’s helping it proactively. He’s the promoter of evil.”
The EU official’s remarks come amid ongoing criticism of X for its content moderation policies since Musk took over the platform in 2022. Under Musk’s ownership, X has rolled back certain moderation rules, prompting the EU to accuse the company of violating social media regulations.
Ms Jourová specifically targeted X for becoming “the main hub for spreading antisemitism,” echoing concerns about the platform’s failure to curb hate speech. She has been a vocal critic of Musk’s policies, particularly the introduction of paid blue-tick verification, which the EU argues has enabled the spread of misinformation.
The European Commission has threatened to fine X for violating the EU’s Digital Services Act (DSA), which regulates online platforms. Musk, however, claims that Brussels offered him a “secret deal” to avoid fines, a claim the EU denies.
This dispute is part of a broader clash between the EU and Musk’s platform. X has faced accusations of non-compliance with advertising transparency rules and allowing content that promotes Hamas, though no formal charges have been brought regarding this issue.
As X’s tensions with Brussels continue to grow, Musk is reportedly considering blocking access to X within the EU. This move would be a significant escalation in the dispute and could have major implications for how online platforms operate in Europe under the bloc’s strict regulations.
With more EU regulations on the horizon, the war of words between Musk and Brussels is unlikely to die down anytime soon.
Read more:
Elon Musk branded ‘promoter of evil’ by top EU official in clash over online moderation

Tesco and Shell have struck a deal to purchase the entire output from the Cleve Hill solar farm, the UK’s largest solar project, which was initially planned to power 100,000 homes.
The agreement sees 65% of the farm’s electricity going to Tesco’s supermarkets, while Shell will manage the remaining 35% for its growing network of electric vehicle (EV) charging stations. The solar farm is expected to go online in early 2025.
The Cleve Hill project, situated on 860 acres of the Kent coast near Faversham, has been a source of controversy since its approval, with local opposition focused on its impact on the Graveney Marshes, a site renowned for its wildlife. Despite protests, the project was greenlit in 2020 by then energy secretary Alok Sharma. The farm, once pitched as a solution to power local homes, is now being used to meet the demands of corporate giants.
Vicky Ellis of CPRE (Campaign to Protect Rural England) Kent voiced frustration, stating: “This project was approved on the premise that it would power homes, not petrol stations and supermarkets. The irony of a major supermarket and an oil giant benefitting from a project labelled as a green energy initiative is not lost on us.”
The project, financed by US-based Quinbrook Infrastructure Partners, will include 560,000 solar panels, generating 373 megawatts (MW) of power—equivalent to half the output of a small gas-fired power station. Some of the solar panels will be mounted on steel frames almost as tall as a double-decker bus due to flood risks in the area.
Tesco’s power purchase agreement with Cleve Hill will account for up to 10% of its UK electricity demand, helping the supermarket meet its sustainability targets. “Cleve Hill solar park, with its ability to generate up to 10% of our UK electricity demand, joins a number of other Power Purchase Agreements we’ve announced over the last five years,” said Tesco CEO Ken Murphy.
Meanwhile, Shell’s portion of the output will support its EV charging network across the UK. With a 10-year agreement in place, Shell’s involvement underlines its ambitions in the renewable energy market, despite ongoing criticism of its core oil business. Shell Energy Europe’s head of power trading, Rupen Tanna, emphasised that renewable energy deals like Cleve Hill are essential to achieving the UK’s net-zero targets.
The Cleve Hill solar farm is expected to be eclipsed by even larger projects approved by the UK government, including the 600MW Cottam solar farm in Lincolnshire. Solar Energy UK’s CEO Chris Hewett noted that the industry aims to triple solar capacity by 2030, stating, “We can expect to see more deals like these in the coming years, as the industry scales up to reach 50 gigawatts of generation capacity.”
Despite its environmental benefits, Cleve Hill continues to spark debate. Ms Ellis and other critics argue that the transformation of the marshlands into a commercial energy hub compromises its natural beauty and wildlife, undermining the original promise of green energy for local homes. As the UK races to expand renewable energy infrastructure, the tension between corporate interests, environmental sustainability, and local communities remains an ongoing issue.
Read more:
Tesco and Shell to power stores and EV stations with output from UK’s largest solar farm, originally meant for homes

HMRC has ramped up its enforcement of National Minimum Wage (NMW) compliance, resulting in £13.7 million in penalties levied against employers during the 2022/23 tax year.
This enforcement push follows the government’s increasing focus on NMW violations, supported by a doubling of HMRC’s enforcement budget to £27.8 million compared to 2015/16.
A recent report by the Department for Business and Trade (DBT) highlights the impact of this enforcement, revealing that more than 108,000 workers were paid NMW arrears after investigations into non-compliance. HMRC closed nearly 3,200 cases, with 900 of them uncovering unpaid wages. The report underscores HMRC’s growing use of the Geographical Compliance Approach (GCA), a targeted three-tiered enforcement method designed to bring employers in specific regions into compliance with NMW regulations.
Under the GCA, employers are encouraged to address NMW arrears voluntarily, but if issues persist, HMRC can impose penalties of up to 200% of the arrears owed. During 2024, three more regions—Liverpool, East Midlands, and another to be announced—will be added to the GCA, following the addition of locations like Belfast, Cornwall, and Watford.
Kyle Newton, Head of National Minimum Wage at Azets, commented on the report: “The sheer scale of HMRC enforcement highlights how widespread NMW non-compliance is. Businesses must review their payroll records and ensure they are adhering to the rules before they face unexpected penalties and reputational damage.”
The government remains clear on its stance, with the DBT stating: “The enforcement of the minimum wage is essential, and we are committed to cracking down on employers who break the law across all sectors.”
The penalties and arrears identified by HMRC in the past year reflect the heightened awareness among workers about their rights, partly driven by campaigns like “Check Your Pay” and direct communication from HMRC to millions of workers.
Businesses across the UK are being urged to take proactive steps to ensure NMW compliance, particularly in light of expected increases to the minimum wage rate, which is predicted to exceed £12 per hour in April 2025. Employers who fail to address discrepancies in pay or working time practices could face further penalties, including public naming by HMRC.
As HMRC’s enforcement activity continues to grow, businesses should review their payroll controls and seek professional advice to mitigate financial and legal risks.
Read more:
HMRC imposes £13.7 million in penalties following National Minimum Wage enforcement action

Hollywood director Alex Proyas, known for his work on the 2004 sci-fi film I, Robot, has accused Elon Musk of copying design elements from the movie for Tesla’s latest products.
In a post on X (formerly Twitter), Proyas shared side-by-side images of his film’s robots and futuristic vehicles next to Musk’s Tesla Optimus robot and the newly revealed Cybercab.
Proyas captioned the post, “Hey Elon, can I have my designs back please?” referencing Tesla’s recently announced $30,000 two-seater Cybercab, which features butterfly-wing doors and lacks a steering wheel—bearing a striking resemblance to the self-driving cars in I, Robot, which was based on Isaac Asimov’s 1950 book of the same name.
Musk also showcased an updated version of Tesla’s Optimus robot, a bipedal humanoid robot, which Proyas suggested mirrors the “NS-5” robots in his film that eventually turn against their human creators. Tesla’s Cybercab is expected to enter mass production by 2026, and the Optimus robot remains under development as part of the company’s growing focus on AI and robotics.

However, some fans of the film were quick to point out that the car driven by Will Smith’s character in I, Robot was based on an Audi concept car included in the film as part of a product placement deal, making the accusation of imitation less straightforward.
Set in 2035, I, Robot follows Smith’s character, a detective wary of robots created to serve humanity, as he uncovers an AI-driven conspiracy to control mankind. The film’s themes of technology, AI, and potential human subjugation resonate with Musk’s own warnings about the risks posed by unchecked artificial intelligence.
Musk, a known admirer of Asimov’s work, titled Tesla’s unveiling event “We, Robot,” in homage to the author. Musk has previously credited Asimov’s writings with inspiring the creation of SpaceX, his space exploration company, and described the books as “really great.”
While Proyas’ comments were made in a light-hearted tone, the similarities between Tesla’s new products and the futuristic designs in I, Robot have sparked online debate. Whether these resemblances are intentional or coincidental, they highlight the ongoing influence of science fiction on real-world technological innovation.
Proyas, who also directed the cult hit The Crow, is no stranger to sci-fi storytelling, but the question remains: are Tesla’s designs a nod to his film, or is it simply a case of life imitating art?
Read more:
Hollywood director accuses Elon Musk of copying designs for Tesla Robots and Cybercab