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The financial services sector needs regulatory reform to drive innovation. Ahead of the Spring Forecast, we highlight key priorities, including crypto regulation, pension reforms, and measures to ease tax burdens on businesses.
The spring statement has to focus on what can be done to stimulate innovation and one of the keys to this for the financial services sector is regulatory reform. For example this might be:
- Further staffing the FCA to allow them the scope to deal more efficiently with applications.
- Expanding the regulatory sandboxes to allow new ideas to be tested out for longer periods, before full authorisation is required.
The press release from the chancellor on the 14th November prior to her Mansion House speech set out her views and we’d love to see her further expand what was discussed there.
Accelerating crypto regulation and the digital pound
The UKs crypto road map forecasts further discussion papers this year and it would be good to hear an update on the government’s plans. This may include a further update from October last year that the phase 1 (stable coins) and phase 2 (crypto trading, exchange and other activities) would be merged. The benefit here would be to speed up the implementation the full regulation of crypto assets.
News on the Digital Pound would be welcome, the benefits of this would include reductions in the cost of making transactions and the possibility of micro-transactions, both of which would help the less-well off to spend only what they need as well as to stimulate the economy.
Pension reforms to boost UK investment
Continued pension reforms could free up capital for investment and build on the idea of the UK ISA allowance. This would ensure there are incentives to invest in the UK. Alongside this there could be changes to the ISA allowances to encourage more equity and less cash savings. (Equity means that the ISA savings can help create larger pots of investment available for the growth of UK businesses).
Easing tax burdens for businesses
On a more general basis, we would like to see some reconsideration of the employers’ NIC hike, it seems that most businesses are already making adjustments to their pay review and hiring strategies to account for the increased cost. This has resulted in impacts on individual taxpayers, something the Labour government stated they wanted to avoid. Perhaps for SMEs there could be some form of tapering to lessen the impact?
If you have any queries, please do reach out to us via the contact form below, or get in touch with our Financial Services team above:
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The post Spring Forecast 2025 Wish List: Financial Services was written by Menzies Harry Payne and appeared first on Menzies LLP.
