Business

The billionaire brothers behind Betfred have topped the Sunday Times 2026 Tax List, after paying an estimated £400.1 million to the UK Treasury, making them the country’s biggest individual taxpayers.

Fred and Peter Done, founders of the betting empire, took the top spot in the annual rankings, with around half of their contribution linked to gambling duties generated by Betfred’s nationwide chain of betting shops.

The list, now in its eighth year, highlights the scale of tax paid by Britain’s wealthiest business figures and celebrities, even as concerns grow over a steady migration of high-net-worth individuals overseas.

Pub tycoon Tim Martin ranked eighth, with a personal tax contribution just under £200 million. His company, JD Wetherspoon, operates 794 pubs and paid a total of £837.1 million in taxes last year, averaging more than £1 million per pub across corporation tax, VAT, business rates and gaming duties.

Martin, who owns 26.7% of the group, said he had no complaints about his personal tax bill, describing taxation as a political choice for voters rather than a personal grievance.

Other leading contributors in the top ten included financiers Alex Gerko, Chris Rokos and Peter Hargreaves, alongside retail figures such as Mike Ashley of Sports Direct, Tom Morris of Home Bargains, the Perkins family behind Specsavers, and Stephen Rubin, a major shareholder in JD Sports and owner of Speedo.

Among public figures, Harry Styles emerged as the highest-contributing celebrity, ranked 54th overall, with an estimated £24.7 million tax bill. Most of his contribution stems from touring and merchandise income generated through his company, Erskine Records.

He finished ahead of fellow singer Ed Sheeran, who paid just under £20 million in tax after receiving a £41 million dividend last year.

At 72nd on the list, Erling Haaland became the youngest entrant. The Manchester City striker, whose earnings exceed £500,000 a week before bonuses and image rights, is estimated to have paid £16.9 million in UK tax.

Other notable names included JK Rowling, the Timpson family, Dyson founder James Dyson, and Douglas and Iain Anderson of the GAP Group, which supplies infrastructure for festivals and major events.

The 2026 list coincides with what the Sunday Times describes as an ongoing exodus of wealthy individuals from the UK. Fourteen of those featured are now resident overseas, with several based in Monaco, Jersey, Guernsey, Portugal, Cyprus, Dubai and the United States.

Despite the trend, Peter Done, 78, said he had no intention of leaving Britain. “We owe this country,” he told the newspaper, adding that successful entrepreneurs have a responsibility to pay tax where their wealth was created.

According to HMRC data, the top 1% of earners in the UK — those earning more than £219,000 before tax — currently contribute around 26.6% of all income tax receipts. While still significant, that share has fallen from 30.7% in 2021–22, partly due to frozen income tax thresholds and the relocation of some high earners abroad.

The Sunday Times Tax List is compiled using the most recent company accounts filed up to 10 January and includes a broad range of levies, from corporation and dividend tax to capital gains, income tax and sector-specific duties such as gambling and alcohol taxes.

Read more:
Betfred brothers top Sunday Times tax list with £400m bill as stars and entrepreneurs pay record sums

Rising taxes and operating costs forced more than one in five UK small and medium-sized enterprises (SMEs) to make redundancies last year, underlining the growing strain on business owners as financial pressures mount.

A survey commissioned by Rathbones, one of the UK’s largest wealth and asset management groups, found that 21 per cent of SME leaders were compelled to cut staff in response to higher costs and tax burdens. The poll of more than 1,000 founders, owners and senior executives paints a picture of businesses being squeezed at both the corporate and personal level.

Overall rising costs were cited as the biggest threat to business by 70 per cent of respondents, while 58 per cent said rising taxation and regulatory burdens were among their most significant challenges. Business rates and employer national insurance contributions were singled out as particular pressure points.

The survey also highlights how closely intertwined business and personal finances are for many entrepreneurs. More than a quarter of SME leaders said over 25 per cent of their personal wealth is tied up in their business, meaning higher operating costs are increasingly spilling over into household finances.

This strain is being compounded by a rising personal tax burden. Frozen income tax thresholds continue to push business owners into higher tax bands, while cuts to capital gains and dividend allowances, alongside higher CGT and dividend tax rates, are eroding post-tax income. For many SME owners who extract profits via dividends, these changes are forcing a reassessment of long-established financial strategies.

Faye Church, senior financial planning director at Rathbones, said entrepreneurs were facing a “double whammy”.

“We consistently hear from business owner clients that they are determined to grow, hire and contribute to the wider economy,” she said. “But heightened tax pressures are increasingly stifling those ambitions. Entrepreneurs are being squeezed from both sides, higher taxes at the business level and rising personal tax bills, making it extremely difficult to plan, invest and build for the future.”

Church added that for most entrepreneurs the boundary between business and personal finances is thin, making it essential to consider both together in an increasingly complex and unpredictable tax environment.

Despite the pressure, some SMEs are adapting by reshaping their workforce. The research found that 9 per cent have increased their use of freelancers or contractors, while another 9 per cent have shifted towards more part-time or flexible roles to manage costs.

Confidence in government support remains low. Nearly two-thirds (62 per cent) of SME leaders said they believe the government does not understand the needs of entrepreneurs. More than half (51 per cent) said targeted measures such as business rates relief or changes to employer national insurance contributions would directly support growth and investment.

The impact is particularly severe in hospitality. More than 35 per cent of hospitality SMEs reported making redundancies last year, well above the SME average, and 69 per cent said increased taxation or regulation is now one of the biggest threats they face.

The findings come as pandemic-era business rates relief has been scaled back from 75 per cent to 40 per cent and is due to expire entirely in April. While ministers have announced further support for pubs, hospitality groups warn that restaurants, hotels and other venues risk being left out.

“Calls from the hospitality sector for targeted relief highlight the increasingly painful pressures facing these businesses,” Church said. “Without action, the mounting tax and cost burden risks stifling the very growth, innovation and local regeneration the UK economy urgently needs.”

Read more:
One in five SMEs cut staff as tax and cost pressures intensify, survey finds

British manufacturers are scaling back exports to the United States as uncertainty caused by President Donald Trump’s shifting tariff policies disrupt trade and supply chains, according to new industry research.

A joint study by Make UK and DHL Express found that 20 per cent of UK factories have already stopped or reduced exports to the US in response to tariff uncertainty. A further 16 per cent said they plan to reduce their reliance on the American market, meaning more than a third of manufacturers now view US tariffs as having a negative impact on their business.

The report also found that many British factories rushed shipments into the US in early 2025 to beat a potential rise in import levies, highlighting the stop-start nature of trade policy over the past year.

Trump has imposed a blanket 10 per cent tariff on UK imports, one of the lowest rates applied to any country. However, Britain was among a group of nations threatened with tariffs as high as 25 per cent if they opposed Trump’s stance over Greenland, a move he later rowed back after discussions with Nato allies at the World Economic Forum in January.

Stephen Phipson, chief executive of Make UK, said the constant shifts in trade policy were forcing manufacturers to rethink long-established relationships.

“Tariffs and trade friction in global markets are creating uncertainty and disrupting longstanding customer and supply chains,” he said. “Many businesses are responding by diversifying exports, adjusting supply chains or scaling back activity to manage rising costs and delays.”

John Cornish, chief executive of DHL Express UK, said manufacturers were adapting rather than abandoning international trade altogether.

“The research shows that UK manufacturers aren’t retreating from global trade, they are recalibrating,” he said. “After years of disruption, businesses are taking a more deliberate and strategic approach to where and how they export, balancing risk while still pursuing growth overseas.”

Despite the pullback, the US remains a critical market for British industry. The study found that 60 per cent of manufacturers continue to trade with America, underlining its importance as an export destination.

However, the uncertainty is accelerating a shift towards sourcing closer to home. So-called “friendshoring” and “nearshoring” are gaining momentum, with 63 per cent of manufacturers saying they expect to buy more UK-produced inputs over the next five years, up from 49 per cent in 2020.

The findings suggest that while US trade remains vital, tariff volatility is reshaping how and where British manufacturers sell and source, with long-term implications for export strategy and domestic supply chains.

Read more:
British factories cut US exports as Trump tariff uncertainty bites

HM Revenue & Customs is preparing to embark on a technology spending programme worth more than £2 billion over the next two years, as long-running efforts to modernise its ageing IT estate continue to run into delays and rising costs.

According to HMRC’s latest procurement pipeline, the tax authority will begin with a large-scale data warehouse transformation programme, expected to be worth around £410 million. The contract will combine the running and modification of existing systems with the migration and eventual decommissioning of legacy data warehouse platforms.

Procurement documents state that HMRC intends to award a single contract to deliver the transformation of its legacy data warehouses, replacing no existing agreement. The legacy technology is widely understood to include SAP’s ECC Business Warehouse, which sits at the centre of HMRC’s wider enterprise resource planning overhaul.

SAP has already secured major uncontested contracts with HMRC, including a £246 million ERP modernisation deal and a separate £275 million upgrade to core tax systems, both awarded without a competitive tender.

One of the largest upcoming procurements is a £350 million contract for public cloud computing services with Amazon Web Services, replacing an existing AWS agreement of the same value. The pipeline also highlights a £306 million contract for “Digital Platforms Run and Change Products”, covering IT services to support live application services, including legacy platforms. This would replace a contract awarded to Accenture in May 2024, also valued at £306 million.

Beyond these headline projects, HMRC has a further series of large procurements planned, each exceeding £200 million. These include a £250 million mobility and workplace services contract to support staff devices and helpdesk functions; a £250 million deal for digital platforms supporting systems such as the Government Gateway and customer insight tools; and a £220 million data centre services contract.

Another significant agreement is the £214 million “Legacy – Retained HMRC Services Contract”, which HMRC has flagged as a direct award. This will replace the existing Core Business Platform Support and Maintenance Services contract, previously awarded to Capgemini for £214.5 million without a competitive process. That deal was later extended, again without competition, by a further £107 million.

In the 2024–25 financial year, HMRC spent £1.16 billion on IT and telecommunications while collecting £858.9 billion in tax revenues. Under the government’s most recent Spending Review, departments were required to undertake a Zero-Based Review of budgets, with a strong emphasis on digital transformation. As a result, HMRC has been allocated an additional £1.6 billion between 2026–27 and 2028–29 specifically to modernise its IT and data infrastructure.

However, the National Audit Office has warned that progress has been slower and more expensive than anticipated. In a report published in November 2025, the NAO said HMRC was taking longer than planned to exit legacy systems and had yet to realise the expected efficiency gains from its digital services programme.

“HMRC has not yet achieved the anticipated efficiencies from its digital services,” the watchdog said, raising questions about value for money as spending continues to escalate.

A spokesperson for HMRC said: “We’re investing in new technology so we can provide better services for our customers. We follow government procurement rules when awarding these contracts to ensure value for money for taxpayers.”

With billions more set to be spent on technology modernisation, pressure is mounting on HMRC to demonstrate tangible improvements in efficiency, service quality and system resilience as it attempts to finally move away from decades-old infrastructure.

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HMRC plans £2bn technology spending spree as legacy systems prove stubborn

UK unemployment is expected to rise to its highest level in five years in 2026 as previously announced tax increases begin to weigh on growth and hiring, according to new forecasts from the EY Item Club.

The forecasters warned that joblessness could peak at 5.2 per cent in the first half of this year, up from the current 5.1 per cent and the highest level since January 2021, as modest economic growth is constrained by tighter fiscal policy and global uncertainty.

The EY Item Club said tax rises announced by Rachel Reeves in her first Budget are set to have a more pronounced impact this year, dampening both consumer spending and business investment. Employers were already hit by a £25 billion increase in national insurance contributions last spring, a move that business groups have warned would curb hiring.

Matt Swannell, chief economic adviser to the EY Item Club, said the effects of fiscal tightening are only now starting to filter through the economy.

“Further tax rises may not be expected in 2026, but previously announced measures will begin to raise revenues,” he said. “At the same time, the government will need to rein in borrowing and keep public spending broadly flat to meet its fiscal rules.

“This tightening of fiscal policy, alongside ongoing global uncertainty, is expected to drag on UK growth over the next year or so.”

Economic growth is forecast to remain subdued. The EY Item Club now expects UK GDP to grow by 0.9 per cent this year — slightly higher than its previous estimate of 0.8 per cent, but still weaker than in 2025. Growth is then projected to recover modestly to 1.3 per cent in 2027 and 1.4 per cent in 2028.

Reeves announced a further £26 billion of tax increases in last November’s Budget, although, as with her earlier package, many of those measures will not take effect for several years. Even so, the cumulative impact of higher taxes is expected to weigh on confidence.

The EY Item Club said global risks remain a major headwind. Trade tensions and tariff disruption, particularly linked to the policies of Donald Trump, are expected to continue undermining private sector sentiment.

Financial markets were unsettled in January after Trump tested Nato alliances and announced plans to nominate Kevin Warsh as the next chair of the Federal Reserve, adding volatility to currency and commodities markets. Concerns have also lingered around inflation and public spending commitments in major economies, including Japan.

On monetary policy, the EY Item Club expects the Bank of England to hold interest rates steady at its meeting this week, before cutting again in April. Rates were reduced four times last year, falling from 4.75 per cent to 3.75 per cent.

Despite slower growth and rising unemployment, pay growth is expected to remain relatively resilient. The EY Item Club forecasts average salaries will rise by around 3 per cent this year, though that will translate into only modest improvements in living standards as higher taxes and prices continue to erode household incomes.

The outlook suggests that while a deep recession is not expected, the UK faces a period of weaker growth and rising labour market pressure as fiscal tightening and global uncertainty converge.

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UK unemployment set to hit five-year high as tax rises begin to bite, EY warns

The Bank of England is widely expected to keep interest rates on hold this week after inflation rose for the first time in five months, although markets believe the door remains open to a cut later in the spring.

Analysts expect the Bank’s Monetary Policy Committee (MPC) to vote to maintain the base rate at 3.75 per cent when it announces its decision on Thursday. The rate is already at a three-year low following four quarter-point cuts last year, which brought borrowing costs down from 5.25 per cent since July 2024.

The expected pause follows data showing inflation climbed to 3.4 per cent in December, moving further above the Bank’s 2 per cent target. While policymakers have signalled that rates are on a downward path, the latest inflation reading has strengthened the case for caution in the near term.

Markets are still pricing in two rate cuts this year, with the first potentially coming as early as March. Economists view February’s meeting as a brief pause rather than the end of the easing cycle.

The nine-member MPC has been closely divided in recent meetings, reflecting differing views over whether inflation is set to fall back quickly or remain stubbornly high. In December, the committee voted 5–4 in favour of a cut, with governor Andrew Bailey casting the deciding vote.

Analysts at UBS said they expect Bailey to back a hold this time. “After swinging the vote in favour of a cut in December, it is likely governor Bailey will vote for keeping rates on hold,” the bank said.

Meanwhile, economists at Morgan Stanley said labour market data could prove decisive for the next move. “We would expect Bailey to focus more on incoming jobs data, where we see a further uptick in unemployment. This could ultimately lead to a March cut,” they said.

EY Item Club also expects no change this week, describing a hold at 3.75 per cent as a “near-certainty”. The forecaster said the MPC is likely to signal that while another cut is possible, the rate-cutting cycle may be approaching its end.

The central bank will publish updated economic forecasts alongside Thursday’s decision, setting out its latest expectations for growth, inflation and unemployment. Bailey is also likely to face questions about recent volatility in global financial markets, driven in part by erratic tariff announcements and geopolitical tensions linked to Donald Trump.

In December, Bailey said he expected inflation to return to, or close to, the 2 per cent target by April. Price growth is forecast to ease as household bills fall following measures announced by Rachel Reeves, including the removal of some green levies and a freeze on rail fares.

For now, economists believe the Bank will opt for patience, balancing early signs of cooling inflation against lingering price pressures and uncertainty in the global economy.

Read more:
Bank of England set to hold rates as inflation rise cools cut expectations