Business

UK companies could be hit with fines of up to £60,000 per worker under proposed changes that would require right-to-work checks to be carried out on freelancers and other casual workers, a move that many business owners remain unaware of.

Under current rules, employers have been legally required since 2008 to carry out right-to-work checks on employees engaged under traditional employment contracts. However, a government consultation — closing on Wednesday 10 December and forming part of the Border Security, Asylum and Immigration Bill — proposes extending those obligations to cover workers in the gig economy.

While the changes are aimed at sectors such as construction, food delivery and beauty services, legal experts warn that the scope could extend far wider, potentially capturing freelance workers, contractors and agency staff across many industries.

The proposals could place a significant administrative burden on small businesses, particularly those that rely heavily on flexible or freelance labour. Zoe Williams, founder of supplement brand Aegle, said the changes had not been on her radar. Williams, who is the sole permanent employee at her business — which recorded £1 million in sales this year — relies on freelancers to operate.

“It’s not something that I have heard of before,” she said. “For small businesses anything that is extra admin is always quite challenging.”

In the consultation document, immigration minister Alex Norris said the measures are designed to “restrict the ability of rogue employers to take advantage of illegal workers and encourage businesses to provide work opportunities to those permitted to work in the UK”.

Rob McKellar, legal services director at employment law specialist Peninsula, said immigration enforcement had become an increasingly prominent political issue. “The government wishes to be seen to do everything it can to tackle illegal immigration,” he said.

The Home Office said last month that it had arrested 171 delivery drivers working illegally in the UK, with 60 detained for removal, as part of an enforcement operation targeting the gig economy.

Failure to comply with the proposed rules could expose businesses to severe penalties. As with existing right-to-work obligations, employers could face civil fines of up to £60,000 per illegal worker. In cases where a business is found to have knowingly employed someone without the right to work, criminal sanctions could include unlimited fines and prison sentences of up to five years.

Audrey Elliott, a partner at law firm Eversheds Sutherland, warned that the risks extend beyond financial penalties. “There is also a significant reputational risk, particularly for businesses bidding for public sector contracts,” she said.

Elliott advised companies to review their workforce arrangements carefully and ensure robust processes are in place for all individuals carrying out work, including freelancers and agency staff. Employers must not only verify right-to-work status before work begins, but also monitor visa expiry dates to ensure ongoing compliance.

Over time, Elliott suggested, some businesses may choose to move away from freelance arrangements altogether. “We may see more employers opting for traditional employment relationships to reduce compliance risk,” she said.

The government has yet to confirm when the changes would come into force, though legal experts expect implementation could be as late as 2027.

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Companies face £60,000 fines under plans to extend right-to-work checks to freelancers

Fast-food chain Leon is set to close a number of restaurants and cut jobs after entering administration, just weeks after being bought back by its co-founder John Vincent in a deal reported to be worth between £30 million and £50 million.

The business has applied for an administration order to enable the formulation of a Company Voluntary Arrangement (CVA), which it said is intended to accelerate a wider restructuring of the group. Leon’s immediate priority will be to reduce the number of loss-making sites as it attempts to stabilise the business and return it to profitability.

Vincent reacquired Leon last month from Asda, which had bought the chain in 2021 as part of the Issa brothers’ EG Group empire. That acquisition valued Leon at about £100 million, significantly higher than the price paid in the recent buyback.

In a statement, Leon said the business has been hit hard by changing work patterns since the pandemic, alongside rising taxes and cost inflation, pressures that have affected much of the hospitality sector. The company added that while Vincent believes Leon drifted from its original values under previous ownership, he recognises the challenges faced by Asda and EG as operators.

John Vincent said that Leon had no longer fitted Asda’s strategic priorities and that the problems facing the chain were shared widely across the industry. He pointed to depressed footfall, hybrid working and what he described as increasingly unsustainable tax burdens as key drivers of losses across casual dining.

Leon will now spend the coming weeks in discussions with landlords, supported by restructuring advisers Quantuma, to agree proposals for the future of the estate. The aim, the company said, is to emerge from administration as a smaller, leaner business that can more easily return to its founding principles.

All Leon restaurants will continue to trade as normal during the process and the group’s grocery arm will not be affected by the CVA. The company has not confirmed how many sites will close or how many roles will be lost.

Where closures do occur, Leon said it would first seek to redeploy staff to other restaurants. Employees who cannot be relocated within a reasonable commuting distance will receive redundancy payments. In addition, the chain has struck an agreement with Pret A Manger that will allow affected staff to apply for roles through a dedicated recruitment channel.

Vincent also used the announcement to call for a review of what he sees as an excessive tax burden on hospitality. He said that for every pound spent by customers, around 36p goes to the government, leaving businesses with little margin to absorb rising costs.

Leon currently operates 71 restaurants, including 44 owned sites and 22 franchised locations. Before its sale by Asda, the chain had already cut hundreds of jobs, reducing headcount by 17 per cent in 2024 as it sought to curb losses. Its most recent accounts showed revenues falling to £62.5 million, alongside losses of £8.4 million, an improvement on the £12.5 million loss reported the previous year.

Founded in 2004 by Vincent, Henry Dimbleby and Allegra McEvedy, Leon is now hoping that a period of restructuring will allow it to rebuild and return to growth once again.

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Leon to close sites and cut jobs as fast-food chain enters administration

Evoke, the heavily indebted gambling group that owns William Hill in the UK as well as the 888 brand, has put itself up for sale as it grapples with rising costs and regulatory pressure.

The company said it is undertaking a review of its strategic options, which includes the possibility of selling the business. Investment banks Morgan Stanley and Rothschild have been appointed as joint financial advisers to oversee the process, although Evoke cautioned that there is no certainty any transaction will result or what form a deal might take.

The move comes just weeks after Evoke warned it would close around one in ten of its betting shops next year as part of efforts to stabilise its finances. The group has struggled to reverse declining performance while carrying a significant debt burden.

Pressure on the business has intensified following changes announced in the recent Budget, which sharply increased taxes on online gambling. From April 2026, the rate of remote gaming duty will rise from 21 per cent to 40 per cent, while tax on online sports betting will increase from 15 per cent to 25 per cent.

Evoke has already withdrawn its medium-term financial targets in response, warning that the new tax regime will add between £125 million and £135 million to its annual duty bill once fully implemented. An £80 million hit is expected in the next financial year alone.

The group said the impact of the tax rises, combined with ongoing operational challenges, had prompted the board to reassess the company’s future direction.

Any sale would mark a significant moment for the UK gambling sector, with William Hill remaining one of the most recognisable names on the high street despite years of consolidation and regulatory tightening across the industry.

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William Hill owner Evoke puts itself up for sale amid mounting tax and debt pressures

The British Design Fund (BDF) has secured a £5 million commitment from the British Business Bank to support early-stage UK businesses designing and manufacturing physical products, strengthening access to equity finance for product-led innovation across the country.

The investment, made through the British Business Bank’s Regional Angels Programme, will support BDF’s mission to back founders building scalable, UK-based product businesses in sectors such as health, sustainability and assistive technology. The programme was launched in 2019 to address regional imbalances in early-stage funding and focuses on angel networks and investors operating outside London.

Managed by Sapphire Capital Partners LLP, the British Design Fund operates as both an early-stage fund and angel network, working closely with founders to help turn innovative product ideas into viable commercial businesses. Its existing portfolio spans the length of the UK, from the South West through to Scotland, reflecting a strong emphasis on regional innovation.

Chancellor of the Exchequer Rachel Reeves said the commitment underlined the government’s ambition to make the UK the best place to start and scale a business. She highlighted the role of scale-ups in job creation and said the funding would help give entrepreneurs the capital and confidence to grow. “Our message is clear – if you invest here, Britain will back you,” she said.

The British Business Bank said the investment recognised the depth of UK talent in advanced engineering and manufacturing. Mark Barry, senior investment director at the bank, said partnering with BDF would help unlock early-stage opportunities nationwide and support founders developing innovative, product-led solutions.

BDF Advisors chief executive Damon Bonser welcomed the backing, saying it would allow the fund to support more entrepreneurs tackling real-world problems through design, engineering and manufacturing. He added that the commitment would help founders move from concept to early-stage commercialisation at a time when access to patient capital remains critical.

Vasiliki Carson, partner at Sapphire Capital Partners, said the investment would contribute to narrowing regional disparities in early-stage funding, helping ensure that promising product businesses can access capital regardless of where they are based.

The £5m commitment adds further momentum to efforts to strengthen the UK’s early-stage investment ecosystem and support home-grown product innovation at a national level.

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British Design Fund secures £5m backing to boost UK-made product innovation

The founders of UK fintech GoCardless are set for a significant financial windfall after the payments company agreed to be acquired by Dutch rival Mollie in a deal valued at €1.05bn (£920m).

The transaction is expected to deliver a major payday for GoCardless chief executive Hiroki Takeuchi, as well as fellow co-founder Tom Blomfield, one of Britain’s most prominent technology entrepreneurs and a co-founder of digital bank Monzo.

Founded in London in 2011 by Takeuchi, Blomfield (pictured) and fellow Oxford graduate Matt Robinson, GoCardless has grown into one of Europe’s leading account-to-account payments platforms, serving more than 100,000 businesses and processing over $130bn of transactions annually.

The deal comes nearly a decade after Takeuchi suffered a life-changing cycling accident in London that left him paralysed from the waist down. He returned to work within months and has since led the company through rapid international expansion.

“I owe a lot to GoCardless as a company, to our investors, and to our team,” Takeuchi said following the announcement. “We’re not doing this to exit the company — we’re doing this because we believe in the future of the combination.”

More than 90 per cent of the deal consideration will be paid in shares, with the remainder in cash. Takeuchi will remain with the combined group in a senior leadership role once the transaction completes, which is expected by mid-2026, subject to regulatory approvals.

Although GoCardless only reached profitability earlier this year — reporting a return to the black in the three months to June — it still recorded a £34.5m pre-tax loss for 2024. Nevertheless, the acquisition marks one of the most significant UK fintech exits in recent years.

The agreed valuation is below the $2.1bn price tag attached to GoCardless during its last major fundraising round in 2022, when it raised $312m from investors including Balderton Capital, BlackRock and Permira. Fintech valuations across the sector have since been compressed by higher interest rates and a tougher funding environment.

Blomfield, who left GoCardless in 2013, went on to co-found Monzo two years later and is now a partner at Silicon Valley accelerator Y Combinator. While the precise ownership structure of GoCardless is unclear, both he and Takeuchi are believed to retain meaningful stakes.

The acquisition will create a combined payments group serving more than 350,000 businesses across Europe, positioning the merged company as a major challenger in the fast-evolving fintech landscape.

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GoCardless founders in line for major payday as fintech sells for nearly £1bn

The UK economy unexpectedly contracted for a second consecutive month in October, underlining the fragility of growth as households and businesses reined in activity ahead of the Chancellor’s Autumn Budget.

Gross domestic product fell by 0.1 per cent in October, matching the decline seen in September, according to figures published by the Office for National Statistics. Economists had expected the economy to return to modest growth, forecasting an expansion of 0.1 per cent at the start of the fourth quarter.

The data showed that momentum failed to recover after disruption in September caused by a cyberattack that halted production at Jaguar Land Rover for much of the month. On a rolling three-month basis, output also fell by 0.1 per cent, pointing to a broader loss of economic traction.

Construction was the weakest-performing sector, with activity down 0.6 per cent in October, while the dominant services sector contracted by 0.3 per cent, marking its worst performance in three months. Production output rose by 1.1 per cent as car manufacturing rebounded following the end of the JLR shutdown, with vehicle output jumping 9.5 per cent.

Economists said the renewed slowdown reflected growing caution across the economy in the run-up to the Budget, alongside a cooling labour market and persistently high inflation. Callum McLaren-Stewart, an economist at Citi, said uncertainty over potential tax rises had likely discouraged consumer spending, while businesses delayed investment decisions amid a lack of clarity over which sectors would be affected.

The ONS said companies across a wide range of industries reported holding back activity while awaiting the outcome of the Budget, including manufacturers, construction firms, wholesalers, technology businesses, real estate companies and employment agencies.

The weak figures prompted some forecasters to downgrade their outlook for the final quarter of the year. Analysts at Deutsche Bank cut their fourth-quarter growth forecast to 0.1 per cent, citing lingering Budget-related uncertainty and subdued business investment.

Business groups including the CBI and the British Chambers of Commerce have warned that the Budget is unlikely to deliver a sustained uplift in growth over the next two years, despite the government’s plans to increase spending in the near term, funded by tax rises later in the parliament.

The Treasury said the government remained determined to boost growth, create jobs and invest in public services. Schools minister Georgia Gould said there were “green shoots” following the resumption of car production, though economists cautioned that underlying conditions remain weak.

The figures come ahead of the Bank of England’s final interest rate decision of the year next week. With GDP contracting and signs of labour market softening, investors are increasingly expecting the Monetary Policy Committee to consider a rate cut from the current 4 per cent.

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UK economy unexpectedly contracts again as growth stalls ahead of Budget

The Office for Budget Responsibility (OBR) has been targeted by almost a quarter of a million cyber attacks over the past year, a dramatic surge that comes just weeks after the fiscal watchdog accidentally leaked the Chancellor’s Budget online.

Freedom of Information data obtained by the Parliament Street think tank shows the OBR faced 238,678 hostile incidents in the past 12 months, including spam, malware, and phishing attempts. The figure represents a 162% increase on the previous year’s 90,958 attacks. Officials say all attacks were successfully blocked.

The revelations add to mounting scrutiny of the organisation following the resignation of chair Richard Hughes, who stepped down after the OBR’s flagship Economic and Fiscal Outlook (EFO) appeared online around 40 minutes before Rachel Reeves delivered her Budget.

A formal investigation led by Ciaran Martin, the former head of the National Cyber Security Centre, found the leak was the result of human error rather than a hostile cyber breach.

Martin’s report identified a “misunderstanding” of a WordPress plugin — Download Monitor — combined with a failure to configure the OBR’s server to block direct file access. The oversight allowed external users, including journalists, to locate and download the document simply by amending a URL.

The report noted that WordPress “can be onerous to configure” and that mistakes of this kind are “easily made”, but the consequences in this case were profound, triggering political chaos and rattling financial markets.

Cyber security specialists say the scale of attempted attacks on the OBR underscores the vulnerability of public sector bodies and the need for much tighter digital controls.

Graeme Stewart, head of public sector at Check Point, said: “These figures underline the growing volume of increasingly sophisticated cyber attacks directed at government organisations.

The accidental publication of market-sensitive documents should serve as a wake-up call about the risks associated with sloppy website management and weak security protocols.”

He added that failures of this kind “increase stress on already stretched systems” and that stronger processes and defences must be put in place “immediately”.

Kenny MacAulay, CEO of accounting software platform Acting Office, warned that the stakes extend far beyond a single department: “Data leaks can cause major issues for public sector bodies. Secure, well-managed publication systems are essential.

The consequences could be catastrophic — not only for the department involved but for the wider UK economy.”

The watchdog, whose forecasts underpin every Budget, is now racing to tighten its security and rebuild trust after one of the most damaging incidents in its 14-year history. With nearly a quarter of a million cyber attempts recorded in a single year — and public scrutiny sharper than ever — the OBR faces strong pressure to demonstrate that its systems, processes and governance are fit for purpose ahead of the next fiscal event.

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Scandal-hit OBR faced nearly 240,000 cyber attacks this year amid website failure that leaked Budget

A new leadership team has been appointed to the All-Party Parliamentary Group on Investment Fraud and Fairer Financial Services following its Annual General Meeting at Portcullis House, Westminster.

Members from both Houses came together on 10 December to elect officers and agree the group’s priorities for the year ahead — a year they warn will be pivotal for rebuilding trust in the UK’s financial system.

Hayes and Harlington MP John McDonnell was confirmed as the APPG’s new Chair, supported by a cross-party group of Vice Chairs: Sarah Bool MP, Lord Davies of Brixton, and Ben Lake MP. Together, they form one of Westminster’s most politically diverse leadership teams dedicated to financial reform.

Accepting the role, McDonnell said he was honoured to lead the group at a “critical juncture” for financial oversight in the UK, stressing that victims of investment fraud and regulatory failures “deserve justice, not excuses”, adding ‘We will not allow a race to the bottom in regulation’.

He argued that consumer protection must be viewed not as a brake on growth but as “the foundation of a financial system that works in the public interest”, pledging that the APPG would hold regulators and industry to account while working collaboratively with parliamentarians, civil society groups and trade bodies.

“We are keen to work with any entity that wants to help the financial sector flourish by serving society as best it can,” he said, adding that the APPG was already preparing its policy agenda for 2026.

Vice Chair Sarah Bool said that while Conservatives believe in free markets, those markets “must also be fair”, warning that widespread fraud and regulatory gaps have damaged public trust and undermined the UK’s financial reputation.

Lord Davies of Brixton highlighted the severe personal consequences of misconduct, saying financial fraud “destroys real lives, pensions stolen, homes lost, futures wiped out”. He vowed to continue challenging vested interests and advocating for ordinary families.

Ben Lake MP emphasised the devastation felt by communities across Wales and the wider UK, citing small businesses ruined by banking scandals and individuals who tragically took their own lives after losing savings to fraud. “These are not abstract policy issues, they affect people in every constituency,” he said.

The AGM reaffirmed the APPG’s central theme — that strong consumer protections and robust enforcement are not obstacles to economic success, but essential to it.

The group remains deeply concerned about what it calls the UK’s growing “Trust Deficit”, warning that weak oversight and enforcement deter public participation in financial markets, damage the City’s international standing and erode systemic stability.

Its 2025 investigative work, including two major parliamentary summits and a high-profile report scrutinising the Financial Conduct Authority, will inform its approach in 2026.

The APPG confirmed it will continue to serve as a platform for dialogue between victims, regulators, parliamentarians, financial firms and civil society. A programme of hearings, evidence-gathering, and policy engagement is already planned for the year ahead.

The group operates on a strictly non-commercial basis. Its Secretariat is run entirely pro bono through the Transparency Task Force, a certified social enterprise, ensuring that its work remains “free from undue influence and firmly rooted in the public interest”.

The group’s purpose is to advocate for victims of financial misconduct and fraud, and to drive reforms that deliver a fair and trusted financial system. It is governed by the rules of the Office of the Parliamentary Commissioner for Standards and receives no parliamentary funding.

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Cross-party MPs elect new leadership for APPG on Investment Fraud amid call for stronger consumer protection

Britain’s live events industry has issued a stark warning to the Prime Minister, urging an immediate review of the government’s new Business Rates system amid fears it will trigger widespread venue closures, job losses and higher ticket prices across the country.

In a strongly worded letter sent to No 10, senior figures from the sector said the changes unveiled at the Budget — including steep revaluations by the Valuations Office Agency (VOA) and a higher Business Rates multiplier for large event venues — would have “devastating, unintended consequences” for the cultural economy.

They warned that the combined effect of unprecedented valuation increases and higher tax charges would “undermine many of the Government’s own priorities”, despite the Budget’s transitional relief measures and lower multipliers for smaller properties.

The letter sets out a bleak picture for music and entertainment spaces at every level. Hundreds of grassroots music venues, the launchpads of artists such as Ed Sheeran — could be forced to shut as rising Business Rates make already fragile finances untenable.

“These venues are where artists like Ed Sheeran began their career,” the signatories wrote. “Their loss would deprive communities of valuable cultural spaces and limit the UK creative sector’s potential.”

The warnings extend to the UK’s major arenas, many of which are facing Business Rates hikes of more than 100%. Operators say these extra costs will almost certainly be passed on to consumers, pushing ticket prices higher at a time when the Government has vowed to tackle the cost-of-living crisis.

“Ticket prices for arena shows will increase,” the letter said. “Dramatic rises in tax costs will likely trickle through to consumers.”

Smaller arenas ‘on the brink’

Mid-sized venues — often the cultural heart of regional towns and cities — are also at risk. The sector fears that dramatic valuation jumps could push many to the edge of closure, triggering thousands of job losses and stripping local communities of vibrant cultural hubs that sustain high-street activity.

“These changes will reduce the visitor spending that supports local hotels, bars, restaurants, shops and taxis,” the letter said. “They will hollow out the cultural spaces that help places thrive.”

Sector says changes conflict with Government’s own growth plans

Industry leaders also accused the government of undermining its Industrial Strategy and Creative Sector Plan, which explicitly commit to reducing barriers to growth for live events. Instead, they argue, the new Business Rates regime risks throttling one of the UK’s most dynamic export industries.

Sector demands 40% rates relief and urgent valuation reform

The letter calls on ministers to take two immediate actions:

• Introduce a 40% Business Rates relief for all live venues.
Film studios have already been granted this level of relief until 2034, and the live events sector argues that venues — similarly classified as “critical creative infrastructure” — deserve the same protection.

• Launch a rapid inquiry into VOA valuation methods for event spaces, which operators say are “disproportionate, inappropriate and unjustified”.

Finally, the industry has requested an urgent roundtable with HM Treasury, the Department for Culture, Media and Sport, and the Department for Business and Trade to develop a plan to “save our venues” before closures begin.

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If you’d like a follow-up commentary, sector analysis, or Business Matters-style opinion column on the wider economic impact of venue closures and rising ticket prices, I can prepare that next.

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Live events sector warns PM of ‘devastating’ impact from Business Rates overhaul

The UK’s long-running “risk premium” in financial markets appears to be unwinding, with economists claiming investors are regaining confidence in Rachel Reeves’ fiscal strategy — and that the shift could save taxpayers billions of pounds over the next five years.

New analysis from the Institute for Public Policy Research (IPPR), a think tank with longstanding ties to Labour, shows gilt yields have fallen faster than those in the US and eurozone since September. The move follows a turbulent year in which UK borrowing costs climbed significantly above other G7 economies, fuelled by persistent inflation, weak growth, and speculation over the new government’s tax plans.

According to the IPPR, yields on UK government bonds have dropped by 0.2 percentage points more than their American and eurozone equivalents over recent months. While modest, the reversal is viewed as a meaningful sign that Reeves’ public embrace of strict fiscal rules, first restated at Labour conference — has reassured money markets jittery since Liz Truss’s mini-Budget in 2022.

Earlier this year, the gap between UK and US 10-year bond yields had blown out to 1.1 percentage points; against eurozone debt, the margin was 0.6 points. On 30-year bonds the divergence was even starker, hitting 1.5 points versus US treasuries. Those differences amounted to a clear “risk premium”, a financial penalty imposed on the UK for political unpredictability and concerns over fiscal credibility.

“The reasons for this premium are not straightforward, especially given that the UK’s fundamentals are stronger than many countries with lower borrowing costs,” the IPPR noted, highlighting Britain’s debt-to-GDP ratio of around 100%, lower than that of the US, Italy or Japan.

Senior Bank of England officials echoed the assessment. Deputy governor Sir Dave Ramsden told MPs on the Treasury committee that gilt market volatility ahead of Reeves’ Budget was noticeably lower than in comparable pre-Budget periods under the previous Conservative government.

“There were no concerns about financial stability,” he said, a marked contrast to the gilt market crisis triggered by Truss’s unfunded tax cuts.

The Bank now expects the Budget to shave up to 0.5 percentage points off inflation next year, thanks largely to Reeves’ decision to remove taxes from household energy bills. Inflation currently sits at 3.6%.

Despite the recent improvement, UK borrowing costs remain elevated by historical standards and are still higher than those faced by the US or eurozone members. The Office for Budget Responsibility forecasts that debt interest payments will exceed £100 billion in every year of this parliament.

However, if the remaining risk premium disappears, the IPPR calculates that taxpayers could save up to £7 billion a year by 2029–30, money that could otherwise be directed to public services or debt reduction.

Carsten Jung, associate director for economic policy at the IPPR, said a “clear, credible” fiscal path could make the UK “a star performer in the G7”, but warned that the Bank of England could undermine progress if it continues its aggressive quantitative tightening programme.

The Bank estimates its bond disposals have pushed up gilt yields by as much as 0.25 percentage points. Jung said the Bank should “pull its weight” and pause sales to avoid unnecessarily driving up borrowing costs at a time when the government is trying to restore stability.

Bond yields have also been kept higher by falling demand from final-salary pension schemes, once major institutional buyers of long-dated gilts.

For now, though, the message from the markets appears clearer than it has been for years: after a volatile 18 months, investors may finally believe that the UK has rediscovered its fiscal discipline.

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Falling gilt yields suggest Rachel Reeves has ‘won back market confidence’