The week’s news included; UK Budget summarised, Apple fined €1.8bn over streaming business, Nationwide to buy Virgin Money for £2.9bn, US lawmakers to vote on banning TikTok, UK M&A activity hits 3 year low.

Below are our top 10 stories that you need to know about. Be sure to check our X page, Facebook page, TikTok page and Instagram Page, for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.

Opinion articles of the week: 

  • City A.M. – Will the mined diamonds industry collapse due to lab-grown gems? Some say it ‘already has’
  • CNBC – Microsoft destroys rival cloud firms’ profit margins, Amazon-backed group alleges
  • BBC News – Your personal data all over the web – is there a better way?
  • City A.M. – Will a British ISA really boost the London Stock Exchange?

1. UK BUDGET

UK Chancellor Jeremy Hunt unveiled his Budget, laying out the government tax and fiscal spending plans. This is, however, the last budget before the general election later this year. Here are the key takeaways:

  • National insurance contributions for employees will be cut by 2% to just 8%. The income tax and national insurance thresholds remain frozen until 2028.
  • Households where the highest earning parents make £60,000 will now be entitled to full child benefit. This increases the current threshold which is £50,000.
  • Non-dom tax rules will be replaced from April 2025.
  • Fuel duty will remain frozen for another year. 
  • The windfall tax on energy companies will be kept in place until 2029 (see below).
  • Air passenger duty will increase for business class plane tickets.
  • There will be a new tax on vaping products from October 2026. Products will face varying rates based on their nicotine levels. Tobacco duty will also increase.

One issue identified for personal finances is the freezing of the income tax and national insurance tax thresholds. Although the national insurance cut will help household finances, more people will be brought into a higher tax band as their salary rises. Historically, the tax band thresholds would increase each budget. Many of the plans are however, not due to come into force until well after the general election. With the Conservative Party set to lose by a landslide, how many of these plans will change under the likely Labour government remain to be seen. 

2. APPLE FINED €1.8 BN OVER STREAMING BUSINESS

Apple has been hit with a €1.8 billion fine by the EU over its practices around music streaming. The tech giant restricted music streaming companies like Spotify from telling users about payment options outside of Apple’s App Store. Apple charges a 30% fee on in-app purchases so it’s typically cheaper for users to make purchases directly with the streaming service or app. Streaming platforms were contractually prevented from telling users about options to pay directly or via a method other than Apple pay. The imposition of these restrictions was an abuse of its dominant market position, according to the EU Commission. Now, Apple has been ordered to remove all restrictions and has been fined €1.8 billion. Apple has said it will appeal the decision.  

3. NATIONWIDE TO BUY VIRGIN MONEY FOR £2.9BN

Nationwide has agreed to buy Virgin Money for £2.9 billion. This marks the largest UK banking takeover since the 2008 financial crisis. The combined banks create the second largest mortgage and savings bank in the UK, behind Lloyds Banking Group. It would have nearly 25 million customers with 696 branches. Virgin Money’s brand will be retained initially but will ultimately be phased out over the next 6 years. Virgin Money has 7300 staff and has 6.6 million customers. There will be no changes to staff in the short term. Virgin Money will remain a separate legal entity with its own banking licence for the time being. The end goal however, is to fully integrate Virgin Money into Nationwide. The deal is subject to shareholder and regulatory approval.

4. EX-TWITTER MANAGEMENT SUES MUSK

Twitter’s former management are suing Elon Musk for $128 million over unpaid severance packages. Four of Twitter’s top bosses were fired immediately after Musk took over Twitter in October 2022. About 80% of Twitter’s total workforce was also fired following the takeover. Now, the former executives are claiming they were sued without reason and a false reasoning was made up to avoid paying them properly. In the joint lawsuit, the executives argue they are owed one year’s salary and stock awards under their agreed severance plan. They also claim this is typical of Musk’s behaviour and he has routinely refused to pay Twitter’s former staff since he took over. Last year, a class action was also filed against Musk’s Twitter for failing to pay $500 million in severance pay to other former staff members. 

5. TIKTOK FACING US BAN

US politicians have approved a bill that would obligate TikTok owner ByteDance to sell TikTok to a US company or face a ban. Lawmakers believe that TikTok is a national security risk due to its alleged ties to the Chinese government. TikTok has always denied these allegations. There is concern about Chinese ByteDance owning such a “dominant media platform” in the US. The social media app has 170 million American users and is one of the most popular apps amongst young people. Around 5 million small businesses also use TikTok. Under the bill, ByteDance will have six months to sell TikTok or it will be removed from app stores in the US. The bill passed a congressional panel and it is now going to the House of Representatives for a vote. The move has sparked a huge backlash from users, many of whom contacted their representatives, urging them to vote against the bill. This move is similar to former President Donald Trump’s ban on TikTok which ultimately never came into force (see previous top 10). 

6. WINDFALL TAX EXTENDED

One of the key announcements in Jeremy Hunt’s budget was the extension of the windfall tax. Oil and gas firms enjoyed bumper profits due to rising wholesale costs. For example, oil company BP made over $27 billion in 2022 and $13 billion in 2023. The Energy Profits Levy (EPL) was introduced in May 2022 to fund household support on energy bills. Oil and gas firms currently face a 35% surcharge on their profits and this was due to end in March 2028. The government has now extended this to March 2029. The EPL has raised an extra £2.6 billion in tax revenue. The extension is expected to raise £1.5 billion. 

7. DENTONS FIGHTING AML BREACH ALLEGATION

The world’s largest law firm by headcount, Denton, is fighting allegations that it breached money laundering regulations. Dentons had a client who was a politically exposed person (PEP) and they allegedly failed to adequately ascertain their source of wealth. The PEP has not been named. A PEP could include a senior politician, member of government or the judiciary or a closely related person to any of the above. Money laundering regulations require law firms to undertake more rigorous checks on PEP’s source of wealth and funds. The Solicitors Regulatory Authority (SRA) argues that Dentons failed to do so when it acted for the PEP between 2013 and 2017. Dentons is now defending itself at the Solicitors Disciplinary Tribunal (SDT). Earlier this year, the SDT fined law firm Clyde & Co. £500,000 for failing to comply with anti-money laundering regulations.

8. UK M&A ACTIVITY HITS 3 YEAR LOW

Merger and acquisition (M&A) activity in the UK has sunk to the lowest level since the pandemic. In the last three months of 2023, UK M&A deals fell by nearly 10%. A total of 367 deals were completed in the quarter. Only 83 deals were completed in December, the slowest month since May 2020 in the depths of the pandemic.  This was also the second slowest quarter for M&A since Q2 of 2020. Analysts claim that the wider economic climate is weak and firms are adopting a more cautious approach. Fortunately, with inflation falling, the outlook is much more positive. Many anticipate markets to perk up in the latter part of the year. 

9. SHEIN COMPANY LAW BREACH 

Shein may have potentially breached UK company law by failing to disclose their owners. On the UK company register, Companies House, all companies must disclose their beneficial owners and/or persons with significant control. This must be an individual and cannot be a company. Shein had listed Roadget Business Pte Ltd, a Singaporean company, as its beneficial owner. Depending on whether Shein knowingly or recklessly supplied this information it could carry criminal liability. Shein described it as an “error” and is now rectifying this. Shein is said to be considering listing on the London Stock Exchange. There has been significant regulatory push back on its plans to list in the US. The retailer is said to be seeking a huge $90 billion valuation. 

10. PAY RISES FOR RETAIL WORKERS

A range of retailers and supermarkets are bumping up pay for staff. Tesco announced that it would increase store workers pay by roughly £1 per hour to £12.02 and to £13.15 per hour in London respectively. This takes pay to equal the updated Real Living Wage. The Real Living Wage is higher than the National Living Wage. The National Living Wage is the compulsory minimum wage for workers over 23. From April, the National Living Wage will increase to £11.44 per hour for all workers over 21. The Real Living Wage is optional and will be £12 per hour outside of London and £13.15 per hour inside London. Similar announcements were made last week at both John Lewis and Co-op. Store staff will also receive pay rises to match the Real Living Wage. Asda had already announced a pay rise for its store staff to £12.04 per hour.