Business

Rumours that the Chancellor is preparing to add VAT to all taxi journeys in the autumn Budget have sparked concern across multiple industries, with hospitality leaders warning the move could deepen an already fragile economic environment.

Charlie Gilkes, co-founder of the Inception Group, which operates restaurants and bars across London, said: “Policies like the taxi tax destroy the ecosystem in which the hospitality sector functions.”

The sector is still reeling from last year’s Budget, which raised employer National Insurance contributions. A 1.2 percentage point NIC increase lowered the threshold at which employers must pay contributions from £9,100 to £5,000 a year. That change has already forced nearly 89,000 job losses in hospitality, almost half of the cuts seen across the wider economy, according to trade body UKHospitality.

With pubs, restaurants and bars struggling to absorb higher staffing and energy costs, any additional burden from VAT on taxis could deter customers from travelling and make commuting harder for staff, particularly women relying on taxis after late shifts.

The effects would extend beyond hospitality. Layla Barke-Jones, partner at Aaron and Partners Solicitors, pointed out that many taxi passengers are elderly, disabled or otherwise unable to use public transport: “These are the people who would be disproportionately hit.”

While local authorities would be able to reclaim VAT under their own regime, higher overall fares are expected as operators adjust pricing to cover administration and compliance costs. That would see passengers across the country paying significantly more for essential journeys.

Taxi operators warn that drivers themselves would be among the hardest hit. A spokesperson for Bolt said: “Drivers are self-employed entrepreneurs, and around 70% work outside London. A flat 20% VAT would inevitably raise costs for consumers and reduce demand, leading to a drop in driver earnings.”

Bolt argues VAT should be applied only to operators’ margins, as under the current system, rather than on full fares — a change that risks pushing up passenger costs while cutting into drivers’ take-home pay.

With speculation mounting ahead of November’s Budget, business leaders fear the so-called “taxi tax” would further erode consumer demand, increase costs for vulnerable passengers, and undermine sectors still fighting to recover from previous policy shifts.

As Gilkes and others warn, what may appear a modest change to the Treasury could prove ruinous for the ecosystem of drivers, passengers and businesses that depend on affordable, reliable taxi services.

Read more:
A ‘taxi tax’ would hit vulnerable passengers and struggling businesses hardest

Baroness Michelle Mone has accused Chancellor Rachel Reeves of fuelling a “government vendetta” against her and her husband Doug Barrowman, following remarks reportedly made by Reeves at a Labour Party Conference fringe event this week.

In a strongly worded statement posted on LinkedIn, Mone said Reeves “openly confirmed” that the government is pursuing a personal and political campaign against her, after responding “Too right we do” when asked about allegations of bias towards Mone and PPE Medpro — the company at the centre of the £122 million sterile gowns dispute with the Department of Health and Social Care (DHSC).

“Rachel, thank you for confirming what Doug and I have long believed,” wrote Mone. “Your comment will now be passed to our legal team, who will find it highly useful in establishing the Government’s bias and position against us.”

Political tension spills into legal battle

The public fallout adds further fuel to the already explosive PPE Medpro case, which concluded its High Court hearings in July. The case has seen the government pursue PPE Medpro for alleged breach of contract during the Covid pandemic — claims the company vigorously denies.

As Business Matters exclusively revealed yesterday, the DHSC rejected two substantial no-fault settlement offers from PPE Medpro, including a complete remake of 25 million gowns or a £23 million cash settlement.

Now, Mone argues that Reeves’ reported comment provides clear evidence of political interference in what should be a neutral legal process.

“Such reckless words have consequences,” she added. “Do you really understand the implications of your actions and the hatred they incite? Shame on you.”

Mone also claims that following Reeves’ remarks, her social media has been flooded with threats and abuse, and is calling on both the Prime Minister to issue a formal apology, and Reeves herself to refer the matter to the Parliamentary Commissioner for Standards.

Taking direct aim at Reeves, Mone accused the Chancellor of presiding over “economic failure,” and claimed that Labour’s leadership was misleading the public on its tax plans.

“Your first 15 months in office have been a disgrace… Perhaps keep the IMF’s number on speed dial,” she wrote.

While the Labour Party has not issued a formal response to the accusations, the remarks attributed to Reeves are likely to add political complexity to a legal case that already sits at the intersection of procurement, accountability and high-profile reputations.

Legal observers say that if Reeves did make the remark as reported, it could complicate the government’s narrative that the DHSC’s civil claim against PPE Medpro is purely contractual and not politically motivated.

Mone and Barrowman’s legal team have long argued that the case is an attempt to scapegoat PPE Medpro for the DHSC’s wider PPE procurement failures, and shield senior government officials — past and present — from deeper scrutiny.

Justice Cockerill is expected to hand down her ruling on the DHSC’s claim in the next few weeks. The question now is whether this latest political intervention will cast a shadow over the judgment — or open the door to a fresh round of legal challenges from Mone and her legal team.

Read more:
Mone accuses Rachel Reeves of fuelling ‘government vendetta’ after Labour fringe remark

HSBC has warned business banking customers that personal identification documents submitted during account applications may have been compromised following unauthorised access to a third-party platform.

In an email sent to customers earlier this month, the bank confirmed that identity documents, images and contact details provided when opening a business account were exposed in the breach. HSBC stressed that its own systems remained unaffected, with passwords, PIN codes and biometric security such as Voice ID uncompromised.

The breach raises concerns about potential identity theft and fraud. HSBC said there was no evidence of fraudulent activity arising from the incident so far, but urged customers to monitor their accounts, credit reports and bank statements closely for suspicious activity.

To mitigate risks, the bank is offering affected customers a complimentary 12-month subscription to Experian’s Identity Plus service, providing monitoring of personal information and alerts for possible misuse. A dedicated helpline managed by Experian has also been set up to handle queries until 8 October 2025.

One affected customer, who declined to be named, told Business Matters: “I provided passport details in good faith to HSBC as it was necessary for identification before opening up a business account. Now I’m worried that money will be taken out of the company account by crooks, with the third-party platform having been hacked. Worse, that my passport details could be sold on the dark web.

I had reservations about providing ID proof in the first place because cyber attacks are now so prevalent but you put your trust in the banks to get online security right, including tech partners. Frankly, nowhere is safe in the online world these days and businessmen and women need to be constantly on alert for data breaches involving their details. In the wrong hands, lives and livelihoods are devastated and there is little redress.”

This latest breach comes after recent high-profile cases, including Harrods’ data breach affecting loyalty scheme members, which also highlighted the vulnerability of customer information in the hands of external providers.

Cybersecurity experts warn that the growing reliance on third-party platforms for data storage and verification continues to expose companies and their clients to heightened risks. The incident underscores the need for firms, particularly financial institutions, to strengthen due diligence on their technology partners.

HSBC said it had worked with external specialists to investigate the incident and had taken steps to prevent further unauthorised access. The bank reiterated that it would never request sensitive information such as PIN codes or passwords by phone or email and urged customers to remain cautious of potential phishing attempts in the wake of the breach.

HSBC has been contracted for a response.

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HSBC warns UK business banking customers of third-party data breach

Artificial Intelligence (AI) is no longer a distant prospect for small businesses — it is already here, reshaping day-to-day operations and opening up new opportunities for growth.

According to new research from YouGov, 31% of UK SMEs are actively using AI-powered tools, while a further 15% say they plan to adopt them in the near future.

Just as AI has transformed wider society — with ChatGPT famously becoming the fastest-growing app in history by reaching 100 million users in just two months — business adoption is accelerating. The challenge now lies in knowing which tools to use, and how to balance automation with human oversight.

One reason for rising adoption is the sheer availability of AI solutions. Many businesses already have access through existing subscriptions. For example, Microsoft has embedded its Copilot AI assistant within Word, Excel, PowerPoint, Outlook and Teams, giving users the ability to draft documents, analyse data and streamline communication.

Kirstie Kavanagh, a tech consultant and AI enablement expert, said: “If you’ve got an enterprise-level Microsoft 365 Business Structured Account, you probably have a lot more in that than you realise. But remember: the AI is simply a copilot, not the pilot.”

This distinction underscores the need for SMEs to run internal audits, identifying where AI can complement — rather than replace — human expertise.

Cybersecurity: risk and defence

AI’s rapid development has also made cyber threats more sophisticated. UK SMEs lose an estimated £3.4 billion annually to cyber attacks, with the average incident costing between £3,398 and £5,001.

Yet AI can also help businesses defend against these risks. From monitoring network traffic to flagging potential breaches, AI tools are now being deployed as part of proactive cybersecurity strategies. Still, human oversight remains essential, particularly when it comes to regulation and compliance.

Christiana, co-founder of FlightStory, the content studio launched with entrepreneur Steven Bartlett, stressed the importance of expert guidance: “Any small businesses that want to start experimenting with AI tools should be seeking expert guidance from partners. When it comes to things like GDPR, compliance and cybersecurity, we’re still going to engage partners like Vodafone Business for advice to make sure we’re doing it right.”

Data privacy is another critical consideration. SMEs adopting new tools should review providers’ privacy policies to confirm compliance with GDPR. As Kavanagh advises: “If you’re a UK-based business and the tool stores data in the UK, does it have a GDPR reference within its privacy policy? Then you can tell instantly whether this tool is taking regulation seriously.”

Equally, businesses must have their own internal policies to guide employees on what data can and cannot be shared with AI tools. This helps avoid unintentional exposure of sensitive or confidential information.

For SMEs, AI can deliver measurable gains in productivity, cost savings and resilience — but only when combined with sound human judgement. From automating routine tasks to bolstering defences against cyber threats, the technology’s potential is clear. The key lies in integrating it responsibly, with expert partners and compliance measures ensuring growth is sustainable and secure.

Read more:
Artificial Intelligence, real change: How small businesses can harness AI for growth

Scottish cleantech spinout SeaWarm has secured £550,000 in funding to accelerate the rollout of its renewable heating technology, designed to cut fossil fuel use and lower carbon emissions across communities.

The University of Edinburgh venture received £250,000 from angel investment syndicate Equity Gap, £250,000 from Scottish Enterprise, and £50,000 from Old College Capital, the university’s in-house venture fund.

SeaWarm’s modular, low-cost heat exchanger system draws stable temperatures from rivers, lochs, seawater and minewater to provide affordable heating and cooling. Operating like a heat pump but using water rather than air, the pods deliver greater efficiency in cold conditions and resilience against salt corrosion, drilling costs and noise.

Each unit, roughly the size of a domestic oil tank, can generate 13kW of heat from just one litre of water per second, sufficient to warm most small to medium homes. The design is compact, scalable, and can be self-serviced by owners, making it well-suited to rural and coastal areas.

Compared with oil and gas, the system can reduce CO₂ emissions by up to 90%, and around 70% compared with electricity, while also cutting energy bills for households and businesses.

SeaWarm’s immediate focus is Scotland’s coastal communities, where heating costs and fuel poverty remain high. The company aims to cut 20,000 tonnes of CO₂ and save 10 MWh of electricity over the next five years, before expanding into wider UK, European and international markets.

Initial demonstration sites include Port Edgar Marina, LAR Housing Trust in South Queensferry, Growforth Ltd in Hillend, and the Museum of Lead Mining in Wanlockhead. Longer-term, the company is targeting high-demand commercial facilities such as marinas, hotels, leisure centres, ferry terminals, and community buildings.

Professor Christopher McDermott, co-founder of SeaWarm and academic at the University of Edinburgh, said: “Our mission is to bring affordable, renewable heating to communities most exposed to rising costs and carbon-intensive systems. This funding allows us to accelerate growth, build partnerships and deliver practical, cost-effective solutions that cut emissions by up to 90% while lowering bills.”

Fraser Lusty, Managing Director at Equity Gap, highlighted the scale of opportunity: “Heating and cooling are among the largest contributors to household costs and carbon emissions. SeaWarm’s technology provides a practical, scalable solution with strong potential to make a measurable difference.”

Scottish Enterprise Director Derek Shaw added that the investment reinforces Scotland’s position in the energy transition: “By investing in clean heat, we can help Scottish companies capitalise on significant economic opportunities linked to the shift away from fossil fuels.”

Heating and cooling account for more than 40% of UK energy consumption, yet many rural and coastal communities still rely on expensive, carbon-intensive systems. SeaWarm’s modular solution is tailored to these environments, with Scotland’s market estimated at £340 million and global demand for heating and cooling set to exceed £100 billion by 2028.

With a clear focus on scaling production, building installer networks and growing internationally, SeaWarm is positioning itself at the forefront of clean energy innovation.

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SeaWarm raises £550,000 to deliver renewable heating and cut emissions by 90% in Scotland’s coastal communities

The British Business Bank has committed €20 million (£17.3m) to Notion Capital’s new €114 million (£98.6m) growth fund, Notion Capital Opportunities III.

The investment strengthens the partnership between the state-backed bank and the London-based venture capital firm, which has a track record of backing high-growth UK and European software companies.

The British Business Bank has been a long-standing backer of Notion Capital, investing in the firm’s last four core venture funds as well as its previous Opportunities Funds. The new growth vehicle is designed to complement Notion’s flagship venture strategy by supplying additional capital to existing portfolio “winners” and select new growth-stage opportunities.

Notion’s model has already supported some of the UK’s most notable tech scaleups, including GoCardless, Paddle, and YuLife.

Focus on growth-stage innovation

Opportunities III will target growth-stage companies across four high-potential sectors:
• Knowledge – SaaS platforms accelerated by artificial intelligence
• Money – fintech and adjacent industries
• Labour – AI transforming service markets
• Machines – AI interacting with and learning from the physical world

These areas, the firm notes, align with Europe’s growing focus on sovereign resilience strategies in cyber security, supply chain and defence technology.

The fund has already made investments, including further backing for venture portfolio company Upvest and new growth deals in Nelly and Kraken. Notion anticipates around a dozen core investments from Opportunities III.

Stephen Chandler, Managing Partner at Notion Capital, said: “I am delighted to announce this, our latest, growth fund. LP demand in a challenging fundraising environment is testament to the strength of our brand and reputation. We are a diverse team spanning 12 nationalities, giving us extraordinary reach and access across a market where AI is driving huge innovation.”

Christine Hockley, Managing Director and Co-Head of Funds at the British Business Bank, highlighted the importance of closing the funding gap for later-stage UK businesses: “While we’re very good at funding startups in the UK, there is a distinct lack of funding for growth-stage companies. US firms often raise more than double the capital at this stage. Our goal is to close that gap and ensure high-potential companies can expand.”

Michael Laycock, Investment Director at the British Business Bank, added: “Notion is a long-term partner for the British Business Bank and a key player in helping innovative UK software companies scale into category leaders. Their latest Opportunities Fund ensures ambitious founders can access continuity of capital as they internationalise.”

The fund launch comes at a time when policymakers and investors alike are calling for more growth-stage capital to help the UK’s most innovative companies scale globally. With its third Opportunities Fund, Notion Capital aims to play a pivotal role in bridging the later-stage funding gap and backing the next wave of European tech leaders.

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British Business Bank backs Notion Capital with €20m for new €114m growth fund

The UK economy slowed sharply in the second quarter of 2025, with official figures confirming growth of just 0.3% between April and June, a marked deceleration from the 0.7% expansion in the first quarter.

Data from the Office for National Statistics (ONS) showed that while the latest quarterly figure was unrevised, revisions to earlier estimates suggest growth in much of 2024 was stronger than first thought, even as momentum weakened heading into this year.

The ONS said annual GDP growth for 2024 remained unchanged at 1.1%, but quarterly revisions painted a more nuanced picture. First-quarter growth last year was revised down from 0.9% to 0.8%, while subsequent quarters were adjusted upwards: Q2 from 0.5% to 0.6%, Q3 from flat to 0.2% growth, and Q4 from 0.1% to 0.2%.

Liz McKeown, ONS director of economic statistics, said: “These new figures show the economy grew a little less strongly at the start of last year than initial estimates suggested, but performed better in later quarters. Quarterly growth rates for 2025 are unrevised.”

Household disposable income per person rose 0.2% in Q2, rebounding from a 0.9% fall in Q1, driven by a £4.4 billion rise in wages and a £4 billion fall in income tax liabilities related to the 2023-24 tax year.

However, households chose to save more of that income, with the saving ratio rising to 10.7% from 10.5%, signalling greater consumer caution. Spending growth remained flat, while consumer-facing services saw a slight fall in output despite overall services growth of 0.4%.

Thomas Pugh, chief economist at RSM UK, said: “The increase in the saving ratio suggests consumers turned more cautious in the second quarter. The big question now is whether speculation about the Budget will undermine confidence further.”

The ONS figures revealed a more subdued picture in some industries. Production output fell by 0.8%, a deeper contraction than the 0.3% initially reported. Construction output grew by 1%, though this was revised down from 1.2%. Services, the largest sector of the economy, expanded by an unrevised 0.4%.

Outlook for second half of 2025

Economists remain cautious about prospects for the remainder of the year. Rising inflation, slowing wage growth and expectations of further tax rises in the autumn Budget are likely to weigh on activity.

Matt Swannell, chief economic adviser at EY Item Club, said growth was likely to remain “sluggish”: “Alongside squeezed real income, further tax rises at the autumn Budget look almost inevitable.”

With interest rate cuts now seen as less likely in 2025, analysts suggest the UK economy faces a tougher environment in the second half of the year, with households tightening spending as uncertainty over fiscal policy builds.

Read more:
UK growth slows sharply to 0.3% in second quarter as households turn cautious

Thousands of taxpayers risk falling foul of HMRC’s rules this autumn, with two crucial deadlines approaching in October.

Missing either of them could leave households facing an instant £100 fine, with penalties spiralling to as much as £1,600 for serious delays.

Andrea L Richards, accountant and chief executive of Accounts Navigator, has urged individuals to act swiftly to avoid unnecessary charges, highlighting the 5 October self-assessment registration deadline and the 31 October paper return deadline.

Who needs to file?

A tax return is required in a range of circumstances. This includes the self-employed who earned more than £1,000 in the past tax year, members of business partnerships, individuals liable for Capital Gains Tax, or those paying the High Income Child Benefit Charge outside PAYE.

Others who may be caught by the rules include those receiving untaxed income such as rental earnings, tips, savings interest or income from overseas.

5 October deadline: Registering for self-assessment

Anyone submitting a self-assessment for the first time must notify HMRC by 5 October 2025. Failing to do so can extend the filing timetable, but Richards warns that delaying registration increases the risk of penalties if the final return is not submitted on time.

31 October deadline: Paper tax returns

Taxpayers choosing to file a paper return must ensure it reaches HMRC by 31 October 2025. Missing this deadline triggers an automatic £100 penalty, even if no tax is owed. Additional fines and interest may follow if the delay continues.

Online filing after October

Many believe that switching to online filing by the 31 January 2026 deadline will protect them from penalties if they miss the October cut-off. However, HMRC calculates late filing penalties from the point the first return was due, meaning the £100 charge will already have been applied. Filing online after October can help in some situations, but Richards stresses it is safer to meet the initial paper deadline where possible.

How penalties escalate

Penalties increase rapidly the longer a return is delayed. After three months, HMRC can impose daily charges of £10, capped at £900. Returns more than six months late attract an additional £300 fine or 5% of tax owed, whichever is greater. At 12 months, a further £300 or 5% is added, taking potential penalties to £1,600 — on top of any outstanding tax liability.

Consequences of not filing

Failure to file a return altogether leaves taxpayers exposed to harsher action. HMRC can issue an estimated tax bill, demand immediate payment with interest, and in extreme cases begin court proceedings.

Appeals against penalties

While HMRC does allow appeals against late filing penalties, taxpayers must first complete and submit the outstanding return. Only those with a “reasonable excuse” covering the entire late period will be considered for relief.

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Double HMRC deadlines this October could hit taxpayers with £100 instant fines

YouTube has agreed to a $24.5 million settlement to resolve a lawsuit President Donald Trump filed over the platform’s suspension of his account in the aftermath of the January 6, 2021 U.S. Capitol riot.

Under the terms, $22 million will be channelled “on Trump’s behalf” to the Trust for the National Mall, a nonprofit that is overseeing the construction of a $200 million State Ballroom at the White House. The remaining $2.5 million will be distributed to other plaintiffs, including the American Conservative Union and author Naomi Wolf.

YouTube, owned by Alphabet (Google’s parent company), did not admit any wrongdoing as part of the deal. The settlement also does not require YouTube to change its content moderation policies or platform features.

This marks the last of three high-profile cases Trump launched against major technology platforms after being suspended from them in 2021. He previously sued Meta (Facebook) and X (formerly Twitter). Meta settled earlier in 2025 for $25 million (with $22 million earmarked for Trump’s planned presidential library) and X reached a $10 million settlement.

Trump’s original complaint, filed in July 2021, claimed that YouTube and the other platforms had unlawfully censored conservative voices by suspending his accounts, contravening free speech norms. However, legal analysts have long pointed out that private platforms are not bound by the First Amendment, which restricts government censorship.

YouTube restored much of Trump’s access in 2023, reinstating his ability to post content after a period of suspension, though he had already been restricted from uploading new videos for some time.

Observers suggest that the settlement may reflect a strategic decision by Alphabet to limit reputational risk and legal exposure rather than proceed with a drawn-out courtroom battle.

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YouTube agrees $24.5m settlement with Trump with $22m going toward White House ballroom

Electronic Arts, the gaming giant behind FIFA / EA Sports FC, The Sims and Battlefield, is set to leave the public markets under a record-setting leveraged buyout valued at $55 billion.

The deal, announced on Monday, will see EA delisted from the Nasdaq and become a privately held company under a consortium led by Silver Lake, Saudi Arabia’s Public Investment Fund (PIF), and Jared Kushner’s Affinity Partners.

Under the terms of the agreement, EA shareholders will receive $210 per share in cash, a premium of roughly 25% over the company’s recent trading price. The consortium will fund the acquisition via a mix of equity (around $36 billion) and debt financing of $20 billion, led by JPMorgan. PIF, which already owns a 9.9% stake in EA, is rolling over its holding into the new structure.

If completed, the deal would eclipse previous records, becoming the largest leveraged buyout ever, as well as one of the largest all-cash transactions in the tech/gaming space.

The deal is contingent on regulatory and shareholder approvals, particularly given the involvement of foreign capital via Saudi Arabia’s sovereign wealth fund. Critics may cite national security and control issues given the strategic importance of gaming and tech.

The heavy debt load (approximately $20 billion) poses financial risk. The success of the deal will depend on EA’s ability to maintain or grow revenues, manage operating cash flow, and service debt obligations.

Some analysts already argue that the $210 per share offer may “undervalue EA’s growth potential,” especially in light of upcoming releases like Battlefield 6.

This deal signals the growing appeal of gaming companies to private capital and sovereign funds. PIF has been active in the games sector, investing in companies like Nintendo and mobile gaming publishers.

For the public markets, EA’s departure reduces the number of major independent game publishers trading, with competitors like Take-Two likely facing increased attention.

The transaction also underscores the momentum for mega deals in tech late in 2025, as capital becomes more available and acquirers make bold strategic bets.

The deal is expected to close in fiscal Q1 2027, pending customary closing conditions such as regulatory approval and shareholder vote.  Meanwhile, EA shares traded higher following the announcement.

In sum, the EA take-private move is a defining moment for the gaming industry: a high-stakes wager on creative IP, AI efficiency, and the promise of unshackled long-term investment against the pressures of public markets.

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Electronic Arts to go private in record $55bn buyout led by Saudi, Kushner & Silver Lake