UK Could Fall Behind in Net Zero Race Explained

UK could fall behind in net zero race, BCC warns


The British Chambers of Commerce (BCC) has warned that the UK could fall behind in the race to achieve net zero.

Research carried out by global management consulting firm McKinsey and Company showed that the transition to net zero could potentially be worth more than £1 trillion to UK business by 2030.

A survey of more than 2,000 firms revealed that 43% believe costs are ‘significant barriers’ in transitioning to net zero. 34% stated a lack of finance prevented them from transitioning.

The BCC has called on the government to address gaps in funding; combat skills shortages; and ensure stability in regard to policies.

Shevaun Haviland, Director General of the BCC, said:

‘The UK has the businesses, ideas and talent to lead the world in low-carbon innovation.

‘But without urgent action, we risk falling behind in the global race for green growth.

‘We need ministers to work with business to tear down the barriers on finance, skills and policy that are holding too many firms back.’

Internet link: BCC

CIOT calls for implementation of IHT transitional gifting rule


The Chartered Institute of Taxation (CIOT) has urged the government to implement a transitional rule to allow older farmers and other business owners to gift assets to the younger generation free of Inheritance Tax (IHT) before changes take effect in April 2026.

Current rules incentivise farmers to keep their farms until their deaths, the CIOT stated in a submission to an inquiry by the House of Lords. Its proposed changes would reverse these incentives and promote lifetime giving.

However, for older farmers where there is a risk that they could die within seven years of making a lifetime gift (but after April 2026), the gift would be ineffective for IHT purposes. According to the CIOT, a ‘cliff edge’ is thus created on 6 April 2026.

It has suggested that the risk could be mitigated by amending legislation so that any gifts of relievable assets made between 30 October 2024 and 5 April 2026 would continue to benefit from the old rules even if the farmer died within seven years.

John Barnett, Vice President of the CIOT, said:

‘We are concerned that bringing in changes to agricultural and business reliefs with a cliff-edge date of 6 April 2026 is leading to great anxiety among older clients as they are unlikely to survive seven years and therefore are unlikely to see making gifts as a solution.

‘We think that there is a straightforward and relatively low-cost transitional rule that could address this concern: allowing gifts made between now and April to continue to qualify for the 100% relief currently available. 

‘While this is not a complete solution to the problem – there may be some for whom making a gift is impractical or impossible if they have lost capacity – it should significantly reduce the risk as it gives a viable and straightforward alternative.’

Internet link: CIOT

Self-employed overcounted for decades by official data


Official statistics have overstated the size of the UK’s self-employed population for two decades, according to the Institute for Fiscal Studies (IFS).

The share of national income flowing to those with the highest incomes has also been over-estimated, adds the think tank.

The mismeasurement stems from a longstanding error in the Survey of Personal Incomes (SPI) – a dataset created by HMRC, derived from tax returns and widely used across government for internal modelling.

The number of people with self-employment income has long been smaller than official statistics suggest. Between 2002/03 and 2017/18, the SPI overcounted the number of individuals with income from sole trading or partnerships by more than 500,000 each year on average – an overestimate of around 14%.

Rapid growth in self-employment is a more recent phenomenon than previously estimated. The SPI suggests a steady rise in self-employment since 2000, but the new data show that growth was in fact much slower before 2009/10, only matching growth rates seen in the SPI after the financial crisis.

Isaac Delestre, Senior Research Economist at the IFS, said:

‘The rise of self-employed work has been one of the most important features of the UK labour market over the last 20 years.

‘But these new data reveal a different narrative to the one told by official statistics – with the period preceding the financial crisis showing much slower growth in the self-employed population than we previously thought. That begs the question: what changed after the financial crisis that led to an acceleration in the growth of self-employment?’

Internet link: IFS

AI will shrink headcount as hiring confidence remains at record low


One in six employers expect AI to shrink their workforce over the next year, with junior roles most at risk, according to a survey conducted by the Chartered Institute of Personnel and Development (CIPD).

Almost two thirds of those surveyed believe that clerical, junior managerial, professional or administrative roles are most likely to be lost because of AI.

The risk is highest in large private sector firms, where 26% expect headcount to fall, compared with 17% in the private sector overall and 20% in the public sector.

Among those who expect headcount to reduce because of AI in the next 12 months, a quarter expect to lose more than 10% of their workforce.

James Cockett, Senior Labour Market Economist at the CIPD, said:

‘AI is transforming the way many people work and has great potential for improving productivity and performance, but it also risks leaving many people behind.

‘Junior roles stand to be most affected by AI, but we need a national drive to retrain and upskill people of all ages and career stages. It’s crucial that we see rapid progress on the development of the Growth and Skills Levy, informed by genuine consultation with employers, to ensure workers are equipped with the skills for an AI-driven economy.’

Internet link: CIPD

Christmas crafters urged to check tax rules


HMRC is urging those making money from Christmas crafts, seasonal market stalls, or selling festive items to check if they need to report their earnings.

As the festive season approaches, the tax authority has launched a Help for Hustles campaign.

This aims to remind anyone earning extra income from activities like making Christmas decorations, upcycling furniture for seasonal sales, or running market stalls, that they will need to tell HMRC if they earn more than £1,000.

The campaign’s guidance explains the important distinction between simply decluttering homes by selling unwanted personal belongings – which doesn’t usually require reporting to HMRC – and trading activities like making items to sell for profit, which may be taxable.

Anyone who earned more than £1,000 from side hustles in the 2024 to 2025 tax year will need to register for self assessment as a sole trader, file their return and pay any tax due by 31 January 2026.

Kevin Hubbard, HMRC’s Director of Individuals & Small Business Compliance, said:

‘Whether you’re making handmade Christmas decorations, selling upcycled furniture, or running a seasonal market stall, it’s important to understand when your festive side hustle becomes taxable trading.

‘Nobody wants an unexpected tax bill, so anyone earning more than £1,000 from their side hustle should tell HMRC. Our Help for Hustles campaign provides clear, straightforward guidance to help people get their tax right.’

Internet link: HMRC press release

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