HMRC raises small business ‘phoenixing’ tax loss to £836mn!150,000 people join 'Unite the Kingdom' march in London! UK economy saw zero growth in July
- TBA
- Sep 15
- 4 min read
HMRC raises small business ‘phoenixing’ tax loss to £836mn
HMRC’s latest annual report shows that tax losses caused by “small business phoenixing” reached £836 million in the 2022–23 financial year, 45% higher than the previous estimate of £570 million. This figure highlights the significant challenges HMRC faces in curbing such practices.
“Phoenixing” refers to the practice where a company goes bankrupt or is liquidated, and then a new company is quickly registered to continue the same business, while the tax debts and other liabilities of the old company are written off.
Experts point out that not all “business restarts” are illegal. If a company goes bankrupt due to genuine business failure and the entrepreneur tries again, this is allowed under UK law. However, if directors or shareholders deliberately use insolvency to avoid tax and creditors, it constitutes illegal phoenixing, involving fraudulent liquidation or tax evasion.
HMRC reported that its total recorded tax losses in 2022–23 amounted to £3.8 billion, with phoenixing accounting for more than one-fifth of the total, compared to the previous estimate of 15%. The National Audit Office (NAO) has also warned that such practices are particularly common among retailers and small businesses.
At the same time, tax evasion cost the UK about £5.5 billion during the same period. The Public Accounts Committee has warned that HMRC may be significantly underestimating the true scale of tax evasion.
To address phoenixing, Chancellor Rachel Reeves promised in this year’s Spring Budget to launch a joint crackdown with HMRC, Companies House, and the Insolvency Service. Measures include:
Requiring certain high-risk businesses to prepay tax;
Expanding directors’ joint liability for company tax debts;
More frequent use of enforcement measures, including director disqualification;
Strengthening information sharing and regulatory cooperation between the three bodies.
With fiscal pressures mounting, tackling phoenixing and tax evasion has become a top priority for HMRC and the Treasury. It is foreseeable that the regulatory environment around tax compliance for SMEs will tighten further, raising demands on businesses for financial management, tax planning, and compliance.
150,000 people join 'Unite the Kingdom' march in London
On September 13 (Saturday), a rally titled Unite the Kingdom—organized by activist Tommy Robinson—took place in central London, drawing an estimated 110,000–150,000 participants, according to police, far exceeding expectations. The atmosphere was tense, and the protest ended with at least 25 arrests and multiple police officers injured.
Protesters waved Union Jacks and St George’s flags, chanting slogans. Robinson called it “the largest free speech rally in British history,” claiming “millions” were involved, and aimed his criticism squarely at the Labour government.
The event was livestreamed on social media, with peak simultaneous viewership reaching 2.9 million. Tesla CEO Elon Musk made a surprise video appearance, urging Britain to “dissolve Parliament and call a new election immediately.”
Other speakers included broadcaster Katie Hopkins and actor Laurence Fox, who criticized immigration policies and court rulings allowing asylum seekers to be housed in local communities, calling them a “denial of local rights.”
Meanwhile, around 5,000 people joined an anti-racist counter-protest. The two sides clashed in Whitehall and Trafalgar Square, prompting police to erect emergency barriers to keep them apart.
The Metropolitan Police said officers faced “serious violence” from some protesters, including punching, kicking, and the throwing of bottles and flares. “Such violence is completely unacceptable,” they stressed. At least nine people were arrested for assaulting police, with more arrests expected.
UK economy saw zero growth in July
The Office for National Statistics (ONS) reported that after 0.4% growth in June, the UK economy recorded zero growth in July, in line with forecasts. However, manufacturing saw its sharpest decline in a year.
As monthly data is volatile, attention has shifted to the rolling three-month trend, which showed 0.2% growth in the three months to July.
The Labour government faces growing pressure to deliver on its key priority of economic growth before the Autumn Budget on November 26.
Analysts widely expect Chancellor Rachel Reeves to announce new tax and spending measures in the Budget, including raising some taxes to reduce the deficit, while pledging that by 2029–30, day-to-day government spending will be covered by tax revenues, and that debt-to-GDP will fall before the end of this Parliament.
Yael Selfin, Chief Economist at KPMG UK, noted that the weak start to Q3 suggests activity could slow further in the second half of the year. She warned that the late timing of the Budget may prolong uncertainty for businesses, delaying investment decisions and dampening short-term growth momentum.
In this context, markets are watching the Bank of England’s September 18 interest rate decision. Policymakers face a tough balance between slowing growth and persistent inflation, leaving the monetary policy outlook highly uncertain.
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