Business

UK businesses are reducing staff numbers at the fastest rate since February, according to new data, as higher payroll taxes and uncertainty over US tariffs put increasing pressure on company costs and consumer demand.

The flash S&P Global purchasing managers’ index (PMI) for July showed a further slowdown in economic momentum, with fresh orders falling, export sales contracting, and employers citing the need to cut headcounts due to rising costs and subdued demand.

“Survey respondents widely commented on the need to reduce headcounts in response to higher payroll costs and subdued customer demand,” the report noted.

The PMI, a key indicator of private sector health, fell from 52 to 51 in July, signalling continued but weakening growth. A figure above 50 suggests expansion, while anything below indicates contraction. Most of the decline came from the services sector, which fell from 52.8 to 51.2, while manufacturing output ticked up slightly to 50.

The survey findings are likely to intensify pressure on the Bank of England, which is widely expected to cut interest rates from 4.25% to 4% at its next meeting in a fortnight in an effort to lift an economy showing signs of stagnation.

Businesses reported that the combination of extra employment taxes introduced in the last budget and growing fears over President Trump’s escalating tariff regime had dampened both demand and business confidence.

According to official figures, the UK economy contracted in April and May, while unemployment rose to 4.7% in May, the highest in four years. Wage growth has now slowed for three consecutive months.

“Higher payroll taxes and a chunky rise in the national living wage back in April are exerting more significant downward pressure on staffing numbers,” said James Smith, an economist at ING. “At the same time, these policy changes appear to be keeping upward pressure on prices.”

Inflation remains stubbornly above the Bank’s 2% target, currently running at 3.4%, and is unlikely to fall significantly before 2026, according to the Bank’s own forecasts.

Smith also noted that inflation was proving particularly persistent in areas such as food and hospitality, driven in part by increased staffing costs and sector-specific wage pressure.

The PMI report also highlighted that export sales declined for the ninth consecutive month, though the rate of decline has slowed slightly. Firms blamed continued uncertainty over US tariffs, as well as heightened competition from Chinese exporters who have been shut out of the US market and are now targeting Europe more aggressively.

Despite the short-term gloom, businesses reported a relatively optimistic outlook for the next 12 months. Many expect interest rates to fall, easing borrowing costs, while a build-up of household savings could fuel a rebound in consumer spending.

“Output growth weakened to a pace indicative of the economy growing at a mere 0.1% quarterly rate, with risks tilted to the downside,” said Chris Williamson, chief business economist at S&P Global Market Intelligence.

As the UK moves into the second half of the year, the data suggests an economy struggling for momentum, with weakening domestic demand, global trade tensions, and stubborn inflation creating a complex challenge for both policymakers and businesses.

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UK firms cutting staff at fastest pace since February as economic pressures mount

River Island has warned that it could collapse by the end of the summer unless landlords approve a proposed restructuring plan that would see the closure of 33 stores, significant reductions in rent, and a need for at least £10 million in funding by September.

In documents detailing the plan—first unveiled in June—the high street fashion retailer told creditors that unless the proposals are passed, it may run out of cash by the end of August, rendering it unable to pay its debts as they fall due. A vote on the proposals and a court hearing are expected next month.

Without landlord support, River Island said it would no longer be able to continue as a going concern and would be forced to enter administration or other insolvency proceedings.

The company blamed its deteriorating finances on “a sharp rise in the cost of doing business” and the ongoing shift toward online shopping, which has left its existing store estate misaligned with customer behaviour.

The high street staple, which trades from over 200 stores, has been battling a challenging retail environment despite a brief recovery in spring trading, helped by warmer weather. The uptick followed a difficult 2024 and early 2025, as UK households cut back on fashion spending to prioritise essentials such as food and energy bills.

River Island reported a £33.2 million loss in 2023, reversing a modest £2 million profit in 2022. Sales fell 19% to £578.1 million, according to the company’s latest filings at Companies House.

The restructuring plan includes £40 million in new funding from the Lewis family’s investment vehicle, which continues to control the business. In addition, River Island’s largest lender, Blue Coast Capital, has agreed to waive interest payments temporarily and extend the maturity date on £270 million in outstanding loans from 2027 to 2028.

A spokesperson for River Island said that discussions with stakeholders had been “positive” and that the company was “confident that we will achieve approval of the plan in the next few weeks.”

In January, the retailer implemented a cost-cutting programme, including redundancies at its London head office, affecting departments such as buying and merchandising.

River Island, which began trading as Lewis’s in the 1940s and later as Chelsea Girl, is the latest in a string of high street retailers to struggle with rising costs, falling footfall, and consumer belt-tightening. The company has long been a staple of UK high streets and shopping centres, targeting younger fashion-conscious consumers.

The retailer’s plight echoes that of Poundland, which recently announced its own restructuring plan. That proposal could result in the closure of up to 150 stores, the shuttering of two distribution centres, and the end of online operations, placing 2,000 jobs at risk.

If River Island fails to secure creditor support, it risks becoming the latest casualty of a retail sector under sustained pressure. Its possible collapse would send shockwaves through Britain’s fashion industry and retail employment landscape — and further accelerate the decline of the physical high street in the post-pandemic era.

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River Island faces collapse unless landlords approve urgent rescue plan

In the polished galleries of Mayfair and the rarefied auction houses of Sotheby’s and Christie’s, a quiet financial revolution is under way.

Britain’s wealthiest investors are increasingly channelling capital into fine art — not merely for aesthetic enjoyment, but as a shrewd, tax-efficient store of value.

Once considered the preserve of collectors and connoisseurs, art is now firmly on the radar of the financial elite. In 2023, the global art market was valued at over $65 billion, with the UK accounting for a substantial 17 per cent, making it the second-largest art economy after the United States. Amid economic turbulence, soaring interest rates, and volatile equity markets, high-end art has proven resilient, particularly at the top end of the market.

According to Deloitte’s 2024 Art & Finance Report, 85 per cent of wealth managers now consider art and collectibles to be viable components of a diversified wealth portfolio.

“Art is increasingly seen as an alternative hedge,” says Laura Kingsley, a wealth advisor at a Knightsbridge family office. “It’s less correlated to equities and, crucially, offers bespoke structures that make it extremely attractive from a tax perspective.”

The tax appeal of tangible beauty

Under UK tax law, fine art can qualify as a “chattel” — a tangible, movable item — offering potential capital gains tax (CGT) relief. Artworks sold for less than £6,000 may be exempt entirely due to the chattel exemption, while those sold above this threshold benefit from marginal relief, often resulting in a lower CGT liability than property or shares. Some pieces, particularly those made from materials expected to degrade, can even be classified as “wasting assets” and are therefore exempt from CGT altogether — though HMRC may contest this.

For inheritance tax (IHT) planning, placing artworks into trusts or corporate structures can defer or mitigate tax exposure. Schemes such as the Cultural Gifts Scheme and Acceptance in Lieu allow donors or their heirs to reduce tax liabilities by offering artworks to public collections, creating both fiscal and cultural value.

“These are powerful tools,” says Fiona Holder, an art tax advisor at Withers LLP. “They allow investors to reduce tax, enhance legacy, and avoid forced sales — all in one elegant move.”

The collector-turned-strategist

One London-based fintech entrepreneur, Amanda Sloane (name changed), began acquiring post-war British art in 2016, initially out of nostalgia. But as values climbed, her strategy evolved. Her £2.5 million collection now includes works by Bridget Riley, David Hockney, and Frank Auerbach, with a portfolio valuation of £4.1 million by 2025.

Key pieces are held in a Swiss bonded warehouse to defer VAT and simplify estate planning. The collection itself is owned via an offshore discretionary trust, shielding it from IHT, and she has donated a Hockney sketch through the Cultural Gifts Scheme, reducing her income tax bill by £180,000.

“At some point, you realise the art is working harder than your index fund,” she says. “Plus, I’d rather see a Hockney every morning than log into an ISA.”

Family offices embrace structured elegance

The Yewtree Family Office, based in Surrey and backed by third-generation property wealth, began investing in contemporary art in 2019. Their £6 million collection includes pieces by Yayoi Kusama, Banksy, and Lynette Yiadom-Boakye. Structured through a UK limited company, the artworks benefit from tax-deductible storage and maintenance costs. Pieces are insured, professionally inventoried, and circulated between private residences and public loans — bolstering both social standing and long-term valuation.

A gifting strategy via the Acceptance in Lieu scheme will eventually offset the family’s future IHT bill as assets pass to the next generation.

“Art offers more than returns,” the family said. “It tells a story. It represents legacy. And in today’s fiscal environment, it also offers protection.”

Caveats of the canvas

Despite its advantages, art investing is not without risk. Liquidity is a persistent issue — even high-value pieces can take years to sell. Valuations are subjective, and without proper documentation (known as provenance), artworks can become legally unsellable. Investors must also contend with market cycles, fashion trends, and forgery risks.

“There’s no Financial Services Compensation Scheme for a fake Rothko,” warns Holder. “This is not a DIY pursuit. You need experienced advisors who understand both the art world and tax code.”

Where money meets meaning

As regulatory scrutiny tightens and traditional tax strategies come under the spotlight, fine art offers a unique blend of discretion, diversification and durability. With the right structure and support, it can deliver not just capital preservation, but cultural resonance.

In an era where spreadsheets meet brushstrokes, it seems Britain’s wealthy are increasingly choosing to hang their assets on the wall — and let them work in silence.

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Brushed with value: How fine art is becoming the tax-efficient investment of choice for the wealthy

A few weeks ago, I was reading an article in The Times that explored a lesser-known quirk of the UK tax system—one that’s quietly influencing the decisions of high-earning professionals across the country.

It looked at the growing number of individuals choosing to structure their income to avoid crossing the £100,000 mark. At first glance, that might sound counter intuitive.

Surely earning more is always better? But what the article revealed—and what many of us are starting to understand more clearly—is that past a certain point, the financial reward for working harder or taking on greater responsibility can begin to diminish significantly. It’s a fascinating and somewhat troubling shift, and one that resurfaced in my mind over the weekend during a discussion with a group of friends.

The conversation wasn’t necessarily about salaries or tax, but as we spoke about career growth, financial planning, and what people’s next steps were, it came up again: that moment when earning more doesn’t always feel like moving forward.

There is a specific point in the UK income tax system—at £100,000—where the rules change dramatically. Not only do you start paying 40% tax on anything earned above that threshold (as part of the higher rate band), but you also begin to lose your tax-free personal allowance entirely. For every £2 you earn over £100,000, £1 of your personal allowance is withdrawn.

By the time your income reaches £125,140, it has been completely removed. This creates an effective marginal tax rate of 60% on the income earned between £100,000 and £125,140. In other words, for every extra pound earned in that band, you’re only taking home 40 pence. I’ve realised that for many people, this is a startling realisation.

What’s perhaps even more surprising is the psychological impact this has. As business leaders and professionals, we’re often driven by a desire to push forward, to do better, to take the next step—whether that’s in the form of a promotion, a larger project, or an increase in pay. But when the financial incentive becomes disproportionate to the effort, responsibility, and stress required, it creates a moment of pause. Should I say yes to that extra work? Is the reward really worth it?

And perhaps most crucially, could I be financially worse off for doing more?

This is especially relevant to a group now commonly referred to as HENRYs—High Earners, Not Rich Yet. Now I didn’t know who this group was when it was brought up over the weekend but it turns out these are individuals typically earning between £70,000 and £120,000, often working in demanding professional roles, raising families, paying mortgages, and contributing

significantly to the economy. On paper, they’re doing well. But the reality can feel very different. Rising childcare costs, higher interest rates, and escalating living expenses are squeezing everyone including this group, which is supposedly leading many to feel stuck between ambition and affordability. The £100,000 tax cliff only adds to that pressure, creating a sort of ceiling that feels artificial, and at times, punitive.

This isn’t just a financial issue; it’s also a cultural and operational one for businesses. If we know that employees may feel demotivated or discouraged from progressing because of how the tax

system affects their take-home pay, what does that mean for retention and progression? Are we unintentionally limiting talent growth by failing to recognise the true impact of taxation beyond the headline rates? And what can employers do to better support their teams in navigating these thresholds?

It starts with awareness. Too often, salary discussions focus solely on gross income, without consideration for how tax structure, benefits, student loans and allowances affect real-world outcomes. Employers need to understand that, for many professionals, crossing that £100k line isn’t a simple milestone—it’s a tipping point. For those managing compensation, offering more thoughtful payment packages that incorporate elements like pension contributions, flexible benefits, or tax-efficient perks can make a significant difference. It’s not just about paying people more, but about helping them make the most of what they earn.

As someone who has spent much of my career advocating for transparency and sustainability in business, I find this situation troubling. Our tax system should be designed to encourage success, not to discourage people from progressing. When individuals start to avoid promotions or extra responsibility because of what it will cost them financially, we’re heading in the wrong direction. I’ve always believed that contribution to society—whether through taxes, employment, or innovation—should be celebrated and supported. But that contribution must also feel fair and proportionate.

The truth is, the people most affected by this threshold are not the ultra-wealthy. They are the business owners, department heads, consultants, and professionals who work long hours, take on significant risk, and support others around them. Penalising them through overly complex and harsh tax rules sends the wrong message. It says: stay where you are. Don’t stretch. Don’t strive. And that’s something we can’t afford—economically or socially.

There’s no easy fix. Tax reform is complex. Talking openly about the realities professionals are facing is the first step. We should feel able to question systems that no longer serve us and to push for smarter, more compassionate frameworks that encourage ambition, reward responsibility, and support the middle layer of our workforce—not just those at the very top or bottom.

It’s not about avoiding tax or gaming the system. It’s about designing a fairer one—where effort and reward stay in healthy proportion, and where success doesn’t have to come at a loss.The £100k tax trap is just one example of where policy and lived experience are out of step. But it’s an important one. And for many professionals—whether they realise it yet or not—it’s already shaping decisions, shifting career trajectories, and redefining what success looks like.

As leaders, we owe it to our teams, and to ourselves, to understand that impact—and to think creatively about how we support ambition, not stifle it.

Read more:
The £100k Tax Trap: Why More Professionals Are Questioning the Value of Earning More

For small businesses, time isn’t just money – it’s opportunity. Every hour your fleet sits idle means missed deliveries, delayed services, and unhappy customers.

Whether you run a courier company, a construction firm, or a mobile food business, keeping vehicles on the road is crucial for staying competitive.

While fuel efficiency and route planning usually take centre stage in fleet management, one area is often overlooked: tyre maintenance. It may sound mundane, but a single tyre issue can throw your schedule into chaos. That’s where mobile tyre fitting is quietly transforming how small businesses manage their fleets.

Tyres: The Silent Profit Leak You’re Ignoring

A worn or punctured tyre might seem like a small inconvenience, but for SMEs, it can be an expensive disruption. Imagine a van breaking down during peak delivery hours – not only does the driver lose hours waiting for a garage, but customers also experience delays, potentially damaging your reputation.

Now multiply that scenario by two or three vehicles over the course of a month, and you’re looking at a serious impact on revenue. According to industry estimates, even an hour of downtime per vehicle can cost small businesses hundreds of pounds in missed jobs, rescheduling, and additional staffing costs.

Traditional tyre maintenance doesn’t help much either. Sending vehicles to garages means:
Pulling drivers off their routes, often for half a day.
Queuing for service, especially during busy periods.
Extra fuel costs for travelling to and from the garage.

For growing SMEs trying to maximise efficiency, that’s a hidden cost that adds up fast.

Mobile Tyre Fitting: The Smarter Way to Keep Moving

Mobile tyre fitting solves this problem by flipping the traditional model. Instead of sending vehicles to a garage, tyre specialists come to you – whether that’s your depot, office, or even a worksite. They bring everything needed to replace, fit, and balance tyres on the spot, usually in less than an hour.

4 Ways Mobile Tyre Fitting Helps SMEs

Reduced Downtime

Your vehicles stay where they are. Drivers can continue working until the last possible moment before the tyre change, minimising lost hours.

Lower Operational Costs

Fewer hours off-road means more completed jobs, less rescheduling, and lower fuel costs. Over time, this translates to better profit margins.

Preventive Maintenance

Many mobile tyre services check tyre wear patterns, pressure, and even alignment issues. Catching these problems early prevents expensive blowouts or roadside breakdowns.

Emergency Support

Some providers offer 24/7 callouts, which is a lifeline for businesses with late-night operations, such as couriers or food delivery services.

Why SMEs Can’t Afford to Ignore It

Big corporations can absorb occasional delays. Small businesses can’t. Your competitive edge comes from reliability – customers expect you to turn up when you say you will. And in industries where word of mouth and repeat business matter, even a single missed job can push a client to a competitor.

Mobile tyre fitting might seem like a minor operational tweak, but it sends a strong message: you’re serious about efficiency, reliability, and professionalism. It’s the kind of behind-the-scenes decision that customers never see but definitely feel when you always deliver on time. There’s a reason more small business owners are choosing mobile tyre fitting over traditional garages – it’s quicker, smarter, and designed for real life. Whether you’re at work, home, or halfway to the shops; Fife Autocentre brings expert mobile tyre fitting to you, when it suits you.

Making Mobile Tyre Fitting Part of Your Fleet Strategy

If you manage more than a couple of vehicles, consider building regular tyre checks into your fleet schedule. Many mobile services now offer ongoing contracts for businesses, which means:

Monthly or quarterly inspections to prevent wear-related issues.
Priority emergency callouts for fleet customers.
Bulk discounts, making it cost-effective for SMEs.

By treating tyres as part of your overall business strategy – rather than just a reactive repair – you turn a potential weak link into a competitive strength.

Final Word

In today’s competitive market, small businesses can’t afford unnecessary downtime. By integrating mobile tyre fitting into your fleet management strategy, you’re not just fixing tyres – you’re improving efficiency, protecting your reputation, and keeping your business moving. Sometimes, the smallest operational changes deliver the biggest wins.

Read more:
Fleet Management Made Easy: How Mobile Tyre Services Cut Downtime for Small Businesses

Bereaved families will face increased financial and administrative pressure following the government’s decision to include pensions in inheritance tax (IHT) calculations from April 2027, despite widespread opposition from both the public and the pensions industry.

Under the new rules, pension pots will be treated as part of an individual’s estate when calculating inheritance tax liabilities. The Treasury expects the policy to raise £1.46 billion per year by 2029–30, with 10,500 estates set to pay inheritance tax as a result, and a further 38,500 estates facing higher tax bills, according to HM Revenue & Customs (HMRC).

The move has been described by critics as the Labour government’s most unpopular tax change to date. A recent AJ Bell poll of 2,050 adults found that 44 per cent opposed the change, with just 21 per cent in support.

Renny Biggins, head of retirement at The Investing and Savings Alliance, which represents over 270 financial services firms, said the decision was deeply disappointing.

“Despite significant pushback from the industry, pensions will now form part of inheritance tax calculations,” he said.

Initially, the government had proposed that pension scheme administrators would be responsible for calculating and paying any tax owed on pension pots. However, following intense lobbying from the pensions industry, the Treasury has shifted the burden to personal representatives, typically either solicitors or bereaved family members.

They will now be required to identify and report all pension assets and pay any IHT due within six months of death to avoid interest charges—placing yet another burden on grieving families.

The government’s summary of responses to the HMRC consultation published this week noted that although some supported the principle of taxing pension wealth, “the majority strongly opposed the proposal to make pension scheme administrators liable”.

Former pensions minister Sir Steve Webb warned that the changes risk overwhelming grieving families with complex bureaucracy at an already difficult time.

“Life is tough enough when you have just lost a loved one without having extra layers of bureaucracy on top,” said Webb, who is now a partner at consultancy Lane Clark & Peacock.

He explained that family members would now have to track down all pensions held by the deceased, obtain statements from each scheme, collate the data, and use HMRC’s online calculator to determine the IHT liability—then pay the tax within six months.

“Complications will no doubt arise when families cannot locate all pensions or when providers are slow to supply the necessary information,” Webb added.

He urged the government to rethink its penalty rules, warning that families could be unfairly fined for late payments caused by delays beyond their control.

“While the changes HMRC has made are undoubtedly good news for pension schemes and those who administer them, it is hard to see that they are good news for bereaved families.”

Critics say the inclusion of pensions in IHT calculations represents a major shift in how retirement savings are treated—reversing previous assurances that pensions would remain outside the tax net and could be passed on tax-free in most circumstances.

Industry experts have questioned the practical feasibility of the policy, warning that many individuals have multiple pension pots, often spread across different providers, with some dormant or difficult to trace.

With inheritance tax already considered one of the most complex areas of the tax system, the addition of pensions is expected to create a significant administrative burden, particularly for families with modest estates.

The Treasury insists the change is a matter of tax fairness, ensuring that pension wealth is treated in line with other assets like property and investments. However, the debate is likely to intensify as the April 2027 implementation date approaches—and as more families become aware of the additional red tape they may soon face during an already difficult period of loss.

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Families face red tape nightmare with inheritance tax on pensions from 2027

The European Union and the United States are close to finalising a trade agreement that would impose 15 per cent tariffs on most EU exports, in a move designed to avert a broader trade war but still likely to sting key European industries.

Diplomatic sources confirmed that member states were briefed on Wednesday by the European Commission about the proposed deal, which would mirror terms recently agreed between the US and Japan. The deal would apply to most goods, though exemptions are being considered for aircraft and medical devices.

In a bid to soften the terms, the EU has offered to cut its average most-favoured-nation tariff rate of 4.8 per cent to zero on selected products as part of an agreement in principle. However, if the deal proceeds, it would still leave the bloc worse off than the UK, which has secured a 10 per cent baseline tariff agreement with the US.

For the German car industry, the proposed 15 per cent tariff would represent a significant blow. While lower than the current 27.5 per cent rate, it is still more than five times the 2.75 per cent duty in place before Donald Trump returned to the White House earlier this year.

The agreement is now in the hands of President Trump, who has made reshaping trade relationships a cornerstone of his second term. However, the White House has yet to confirm the deal, with spokesperson Kush Desai cautioning that “any discussion of trade deals is speculation unless announced by the president.”

While negotiations continue, Brussels is preparing a sweeping package of countermeasures should Trump reject the deal. On Wednesday, the European Commission threatened to impose €93 billion (£80 billion) in retaliatory tariffs on a wide range of US goods.

This would include products from an earlier €21 billion list—featuring poultry and spirits—merged with a newer €72 billion list that targets high-value items such as cars and Boeing aircraft.

If approved by EU member states in a vote expected in the coming days, the counter-tariffs would come into effect as early as 7 August. EU diplomats have also discussed invoking the Anti-Coercion Instrument (ACI), a powerful legal tool that could go beyond tariffs and allow the bloc to ban certain US services—a move that would significantly affect US tech firms operating in Europe.

Only France has called for immediate implementation of the ACI, arguing that the bloc must demonstrate it is willing to act decisively.

“The EU’s primary focus is on achieving a negotiated outcome with the US,” said Olof Gill, trade spokesperson for the European Commission. “But we are also preparing for all outcomes. To make countermeasures clearer, simpler and stronger, we will merge lists 1 and 2 into a single list.”

Some analysts argue the EU has already mishandled its negotiating position. Tobias Gehrke, senior policy fellow at the European Council on Foreign Relations, said the bloc had failed to use its leverage after Trump issued his 30 per cent tariff threat earlier this month.

“There is a sense that the bloc has fumbled its hand, despite holding decent cards,” Gehrke said. “The EU should have immediately retaliated against US tariffs. While the mantra ‘negotiate from a position of strength’ was oft-repeated in speeches, any associated actions never materialised.”

A final agreement on tariffs is expected to be a key point of discussion in Thursday’s summit with China, which will bring together European Commission president Ursula von der Leyen, EU Council president António Costa, and Chinese president Xi Jinping.

With pressure mounting on both sides of the Atlantic, the coming days will prove crucial in determining whether the EU and US can agree to a compromise—or escalate into a full-scale trade confrontation.

Read more:
EU and US close in on trade deal with 15% tariffs as Brussels prepares retaliatory strike

Santander UK is facing a growing backlash from small business owners after introducing charges to business accounts that were previously guaranteed to be “free for life” — prompting accusations of broken promises, misleading conduct, and possible regulatory scrutiny.

An open letter submitted this week to Santander’s top executives, and shared with Business Matters, outlines the growing frustration among SMEs who feel misled after banking with Santander for more than a decade under what they believed was a permanent fee-free agreement.

“This wasn’t a vague marketing statement — it was a binding commitment,” writes Steve Richardson, managing director of Full Production Ltd, who opened a business account with Santander in 2010 based on the written guarantee. “To revoke that commitment now, more than a decade later, under the guise of internal product migration, is both misleading and ethically questionable” .

Santander’s original marketing material from 2010 offered “Free Business Banking, For Life”, with a caveat that charges would only apply if laws or banking regulations changed. In the absence of any such change, customers assumed their accounts would remain free.

That promise was tested in 2012, when Santander attempted to reclassify accounts and impose fees. After public pressure, the bank reversed course and upheld the original free-for-life commitment — an act widely praised at the time by consumer groups and the press .

Fast forward to 2025, and the story has resurfaced — only this time, the change is going ahead. Santander claims the affected accounts were migrated to its “Business Every Day” product in 2015, and that the original terms no longer apply. But many customers say they were never informed that such a migration would void their lifetime fee guarantee, and feel blindsided.

Business owners speak out

The open letter — addressed to Mike Regnier, Chief Executive of Santander UK, and Enrique Álvarez Labiano, CEO of Retail and Business Banking — warns that thousands of SMEs could be affected and calls for Santander to honour its original commitment.

“If a bank cannot stand by its word — especially one given in writing and without caveat — what confidence can customers have in any future product or assurance?” the letter asks.

Some business owners have already submitted complaints to the bank and financial regulators, with calls for parliamentary and media scrutiny now growing. The issue has also caught the attention of The Guardian, The Telegraph, and the BBC, reviving concerns about long-standing trust issues between high street banks and small business customers .

The latest charges introduced by Santander include an annual £120 fee on what were previously free accounts. Customers are also being asked to consider migrating to alternative packages — none of which match the original free-for-life promise.

Critics argue that, in addition to undermining trust, the decision comes at a particularly difficult time for SMEs, who are already facing rising costs, squeezed margins, and a fragile economic environment.

While Santander insists it is acting within the terms of its account agreements, business owners and legal commentators are questioning whether a unilateral reclassification of accounts can override an explicit, written lifetime guarantee.

“The right to change an account type does not override or invalidate a specific and binding contractual promise,” the letter argues. “None of the [stated] exceptions — changes in law, regulation or tax — apply here” .

If regulators agree that the promise constituted a contractual assurance, Santander could face formal complaints and potential enforcement action. At the very least, it risks reputational damage at a time when trust in retail banking remains fragile.

Santander has yet to issue a detailed public response, though affected customers have already begun contacting their MPs and industry bodies. Business Matters understands that pressure is mounting for the bank to issue a revised statement — and potentially backtrack once again, as it did in 2012.

With legal claims now being explored and press attention intensifying, this story is unlikely to disappear quietly.

“This is not simply about fees. It’s about trust,” the letter concludes. “A promise made in good faith… should not be quietly abandoned.”

Read more:
Santander under fire as ‘free for life’ business banking customers hit with fees

The UK’s competition watchdog has said it will move to impose new rules on Apple and Google after designating them as holding “strategic market status”, a label reserved for firms with entrenched dominance in critical digital markets.

The Competition and Markets Authority (CMA) said the move is aimed at promoting greater competition and innovation in the mobile sector, which it says has become too reliant on the two US tech giants.

The regulator’s investigation, launched in January, found that Apple and Google effectively hold a duopoly over mobile devices in the UK through their iOS and Android operating systems, app stores and browsers. The CMA has now set out “roadmaps” to make changes it says are “proportionate, pro-innovation”, and in the interest of both UK consumers and businesses.

Areas of initial focus include reforming how the companies run their app stores, particularly the fees developers pay and restrictions on in-app payment methods. The CMA also said it will explore whether digital wallets should be opened up to competitors, citing Apple’s restrictions as a potential barrier to financial innovation.

“Apple and Google’s mobile platforms are both critical to the UK economy,” said Sarah Cardell, chief executive of the CMA. “But our investigation has identified opportunities for more innovation and choice. Time is of the essence: as agencies and courts globally take action in these markets, it’s essential the UK doesn’t fall behind.”

However, the watchdog stopped short of more sweeping reforms, such as requiring Apple to allow alternative app stores or third-party payment systems, decisions that have proven controversial elsewhere. These measures have been postponed for further consideration until at least 2026, prompting criticism from industry figures and campaigners.

Tom Smith, a competition lawyer at Geradin Partners and former CMA director, said the watchdog was “ducking major decisions” and risked acting too timidly.

“The CMA is proposing some useful measures, but it’s shying away from actions that would really threaten the entrenched positions of Apple and Google,” he said.

Epic Games CEO Tim Sweeney, whose company has been embroiled in global legal disputes with both tech giants, described the CMA’s position as “surprisingly weak”, comparing the UK app store ecosystem to a “Soviet supermarket”.

He said Fortnite’s return to Apple’s UK App Store, and the launch of Epic’s own mobile store, were now “uncertain”, even as the company prepares to re-enter other markets, including the EU, Brazil, and Japan.

Apple said the proposed rules could “undermine privacy and security”, threatening its ability to protect users and maintain innovation.

“We’re concerned the rules would force us to give away our technology for free to foreign competitors,” a spokesperson said. “We will continue to engage with the regulator to ensure these risks are understood.”

Google, meanwhile, said the CMA’s findings were “disappointing and unwarranted”, arguing that Android is open-source and pro-competitive, with benefits for users and developers alike.

“In 2022, Android generated over £9.9 billion for UK developers and supported more than 457,000 jobs,” said Oliver Bethell, Google’s senior director of competition. “It’s vital that new regulation remains proportionate and doesn’t become a roadblock to UK growth.”

Being designated with strategic market status carries significant regulatory consequences. The designation, which lasts for five years, allows the CMA to enforce strict conduct rules and, in cases of non-compliance, impose fines of up to 10 per cent of global turnover.

The investigation is taking place under the UK’s new pro-competition digital regime, which is part of a wider government initiative to rein in big tech dominance and stimulate growth in UK digital markets.

But the timing of the CMA’s action has drawn scrutiny. The appointment of Doug Gurr, a former Amazon UK executive, as CMA chair earlier this year sparked concerns about independence, with some critics claiming the regulator risked being too soft on big tech. The government has rejected those claims.

The CMA has committed to consulting further before finalising rules, with more detailed proposals expected in 2026. Until then, pressure is likely to mount from developers and consumer advocates who have long argued that the mobile ecosystem is skewed in favour of the dominant gatekeepers.

As the UK joins other global regulators in challenging the dominance of Apple and Google, the success or failure of the CMA’s approach may shape the future of digital market regulation across Europe and beyond.

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CMA targets Apple and Google with new rules to open up mobile platforms to competition

UK car and van production has fallen to its lowest level since 1953—excluding the pandemic shutdown—after a bruising six months for the automotive sector marked by uncertainty over US tariffs, factory closures, and confusion around new electric vehicle (EV) grants.

Figures released by the Society of Motor Manufacturers and Traders (SMMT) show that car output fell 7.3% in the first half of the year, while van production plunged 45%, driven in part by the closure of Vauxhall’s Luton plant.

The slump leaves the UK auto industry at its weakest point in seven decades, despite a modest uptick in June following the implementation of a long-awaited US-UK tariff deal that reduced tariffs on UK-built vehicles exported to America from 27.5% to 10%.

Mike Hawes, SMMT’s chief executive, called the figures “depressing” and said he hoped the first half of 2025 marked “the nadir” for the industry. However, he warned that the UK was unlikely to return to its 2021 output of one million vehicles annually by the end of the decade.

“The government’s 2035 target of 1.3 million vehicles per year is quite some ambition from where we are,” Hawes said. “We clearly require at least one, if not two, new entrants to come into UK production to achieve it.”

One bright spot was the production of electrified vehicles, which rose by 1.8%. Battery electric, hybrid, and plug-in hybrid models now account for more than two in five vehicles produced in the UK.

However, the SMMT raised concerns about the lack of clarity around the government’s new EV grant scheme, which offers up to £3,750 for vehicles priced below £37,000. While the return of incentives was welcomed, the criteria for eligibility remain opaque.

Grants will be awarded based on the carbon footprint of the vehicle and its battery during production, and only to manufacturers with verified science-based targets—but the government has yet to publish clear thresholds.

“The difficulty is, we don’t know. Nobody knows—not even government—really knows yet which models and which brands will qualify,” said Hawes. “Your dealer cannot tell you whether the model you’re considering is eligible.”

He warned that with September being the second-biggest month for new car registrations, clarity was urgently needed.

A Department for Transport spokesperson said that dozens of models were expected to qualify for the new grant and that £650 million in funding would be awarded on a first-come, first-served basis. The government said it was engaging closely with manufacturers and had published guidance to support applications.

The UK’s second-largest export market for vehicles is the United States, and several manufacturers paused or scaled back production earlier this year amid uncertainty over President Trump’s shifting tariff policies.

The new US-UK tariff agreement, which took effect on 30 June, has already had a small positive effect on June production figures, according to the SMMT. However, Hawes stressed that sustained recovery would require long-term stability and greater policy clarity, especially around EV policy.

With the electric transition accelerating globally, the UK risks falling behind unless it can attract new investment in battery production, gigafactories, and domestic assembly.

“We’re seeing record EV production shares, which is a sign of strength. But the fundamentals are fragile,” said Hawes. “We need certainty, capacity and competitive conditions to turn recovery into growth.”

While the government remains optimistic that its EV grants and trade deals will provide a substantial boost, the SMMT’s warning paints a stark picture of an industry at a crossroads—caught between global headwinds and domestic policy delays, and in urgent need of momentum.

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UK vehicle manufacturing hits 70-year low as industry faces tariff turmoil and EV grant confusion