UK crypto fraud totalled £226m in 2021-22, with almost half a billion pounds being lost to scams over the past three years, according to data from Action Fraud
Cases of cryptocurrency scams have surged by almost a third this year as fraudsters continue to rake in hundreds of millions.
The value of UK crypto fraud hit £226m in 2021-22, up from £171m in 2020-21 and £71m the year before, the data from Action Fraud revealed.
Around 10,030 reports on crypto fraud were made in 2021-22, up from 8,676 the previous year.
Law firm Pinsent Masons, which obtained the information, said despite the decline of many cryptocurrencies, small investors were still being charmed by ‘get rich quick’ schemes.
Hinesh Shah, senior associate forensic accountant at Pinsent Masons, said: ‘Whenever times are tough, fraudsters always seek to prey on less experienced investors by promising huge returns.
‘Given the huge sums which some crypto investors made during the boom, scams involving cryptocurrencies can be especially potent for smaller investors who may be desperate to make a ‘quick buck’.’
Many investors continue to lack the necessary skills and experience to tell a legitimate cryptocurrency investment from a fraudulent one, Shah warned.
Shah added: ‘People should always be cautious when they receive an unsolicited suggestion to invest, from sources which they don’t recognise. This is especially true when it comes to cryptocurrencies.’
The firm also warned of ‘rug pulls’ where developers of tokens steal funds raised from investors and ‘pump and dump’ scams where they create excitement around an asset and sell their holdings when the price rises, leaving investors exposed to any falls in value.
In addition, there are fraudulent initial coin offerings, where a new token being launched does not exist.
This follows after the collapse of the cryptocurrency exchange FTX and the resignation of its founder, Sam Bankman-Fried.
The crypto exchange, which was valued at $32bn (£26bn), filed for bankruptcy after a surge in withdrawals saw an $8bn black hole in its finances.
FTX currently owes around $3.1bn (£2.6bn) to its largest creditors after allegedly using customer funds to prop up its losses.
The threshold for the additional rate of income tax will be reduced to pull more top earners into the 45p tax bracket
The Autumn Statement reduces the income tax additional rate threshold from £150,000 to £125,140, increasing taxes for those on high incomes from 6 April 2023.
The threshold change will raise £420m in 2023-24, rising to £790m in 2024-25.
Chancellor Jeremy Hunt said: ‘We have tried to be fair by following two broad principles, by asking those with more to pay more. I have not raised headline rates of tax.
‘This means that those earning £150,000 or more will pay just over £1,200 more a year.’
At the same time, the thresholds for base rate and higher rate taxpayers will be frozen until 2028, a further two years added to current plans which will drag more people into higher rates of tax.
Rachel McEleney, associate tax director at Deloitte, said: ‘Those with income between £125,140 and £150,000 will pay an extra 5% income in excess of the new threshold. They will also lose their eligibility for the £500 personal savings allowance, resulting in extra tax on savings income of up to £225. These measures are expected to raise nearly £5bn over the next five years.’
Alex Davies, CEO and founder of Wealth Club said: ‘However necessary, this announcement is brutal for higher earners and investors.
‘Around 250,000 more people will be paying the top rate of tax, many allowances will be frozen until 2028 and the dividend and capital gains tax allowances are being slashed.
‘The good news is there are still plenty of perfectly legitimate ways you can reduce the tax you pay, from investing in pensions and ISAs to crystallising capital gains liabilities now rather than next year.’
Justine Riccomini, head of tax at ICAS said: ‘The Chancellor’s announcement that the 45p additional rate band for income tax will apply at £125,140 from 6 April 2023, instead of the current level of £150,000. This will not apply to Scottish taxpayers in respect of earned income, but will apply to interest income as tax rates are set at a UK wide level.’
Jeremy Hunt has been named as Chancellor, replacing Kwasi Kwarteng who has been sacked by the PM after five weeks in the job
The former health minister under former Prime Minister Boris Johnson, Jeremy Hunt is understood to be taking over the most senior role in the government.
In his resignation letter to Liz Truss, Kwarteng wrote: ‘When you asked me to serve as your Chancellor I did so in full knowledge that the situation we faced was incredibly difficult, with rising global interest rates and energy prices. However, your vision of optimism, growth and change was right.
‘As I have said many times in the past weeks, following the status quo was simply not an option. For too long this country has been dogged by low growth rates and high taxation – that must still change if this country is to succeed.’
He added that it was important to continue to commit to the growth plan set out on 23 September and said ‘the medium term fiscal plan is crucial to this end’.
In addition, Chris Philp, chief secretary to the Treasury has been moved to the Cabinet Office. Both have only been in post since 5 September.
Philp has been replaced by Edward Argar with immediate effect. He was previously paymaster general and minister for the Cabinet Office from 6 September 2022 to 14 October 2022.
Under Johnson’s government he was minister of state at the Department of Health and Social Care between 10 September 2019 and 6 July 2022. He was elected as Conservative MP for Charnwood in 2015.
Within weeks of being appointed, Kwarteng set out a raft of tax changes in the mini Budget on 23 September, which were not costed and led to financial stability as the City opposed the measures. At the time, he cancelled the rise in corporation tax from 19% to 25%, as well as cutting the higher rate of tax to 40p, which was quickly reversed, and knocking 1p off the base rate to 19% from April 2023.
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said: ‘Parachuting Jeremy Hunt into number 11, who was a key supporter of her rival for the leadership, Rishi Sunak, shows how desperate the Prime Minister is to build bridges with the wider Conservative Party.
‘It shows a growing awareness that concentrating group-think in a small cabal of fervent fans might have been partly to blame for the political and economic debacle the government has experienced.
‘Jeremy Hunt also campaigned against Brexit so there will be hopes the new Chancellor will adopt a more reconciliatory approach towards the EU when it comes to any cabinet discussions on the direction of travel for trade talks.’
One in six English councils could run out of money as early as next year with a lack of investment in finance, procurement and digital transformation
According to data from Grant Thornton’s Financial Foresight tool, councils face a £7.3bn black hole by 2025/26, an increase of £4.6bn since the beginning of this year.
Following the cost of living crisis, including the war in Ukraine and a global pandemic, the financial sustainability of local public services continue to erode.
Without additional income, councils will need to save over £125 per head of population by 2025/26.
This is more than the combined average spending per head on areas such as homelessness, sports and leisure facilities, parks and open spaces, alongside libraries, waste collection and disposal, and recycling (£121.19).
Philip Woolley, head of public services consulting, Grant Thornton UK LLP, said: ‘Local government has faced unprecedented demands and pressures over the last decade and without action from both central government and councils, in the face of these inflationary pressures, the list of authorities in need of exceptional support looks set to grow quickly.
‘The additional Covid-19 funding – while critical to support immediate challenges – has not addressed underlying systematic issues or the precariousness of councils’ financial sustainability in the face of economic instability.
‘Local authorities are also now facing the risk of interest rate rises increasing debt financing costs and the real risk of reduced funding from central government, in response to the current economic turmoil facing the country.’
Through a decade of budget pressures and changing policy demands, much-needed innovation has not been adopted across councils.
In addition, the lack of investment in support functions such as finance, procurement and digital transformation has diminished the local government’s ability to tackle the challenges of the next few years.
While English councils have seen small increases in total reserves following government support during the pandemic, from £24.7bn in April 2020 to £30bn in March 2021, this increase is more likely the result of suppressed demand in areas such as social care, caused by lockdowns.
This latest forecast suggests that the increase in reserves will not offer a significant enough financial buffer to stop financial failure at councils.
Woolley added: ‘We see four key steps to meeting this challenge: clarifying roles and responsibilities of councils, a requirement to develop a financial stability plan that is government backed and locally owned, strengthening local governance and, critically, resolving the long-awaited fair funding review for local government.
‘Without committed intervention from all sides, there is a risk that the sector levels down instead of up.’
The forecast tool has been modelled using a range of evidence-based assumptions including the ongoing impacts of Covid-19 and inflation.
The Chancellor Kwasi Kwarteng has confirmed that the government has U-turned on its plans to scrap the 45p rate of income tax
Kwarteng announced the U-turn on Twitter this morning, saying: ‘We are not proceeding with the abolition of the 45p tax rate. We get it, and we have listened.
‘It is clear that the abolition of the 45p tax rate has become a distraction from our overriding mission to tackle the challenges facing our country.
‘This will allow us to focus on delivering the major parts of our growth package’, including the Energy Price Guarantee, ‘to support households and businesses with their energy bills’.
The plan was announced in the tax-slashing mini-budget last Friday, which included scrapping the 45p tax rate, which would cut tax by 5% to 40% for those earning over £150,000 a year.
However, the plan was criticised as unfair amid the current cost-of-living crisis, and required a vote before it could be approved.
Several Tory MPs have voiced their criticisms of the plan, including Grant Shapps who warned that the prime minister would likely lose a Commons vote on the proposal.
Shapps told the BBC: ‘Let’s not muddy the water with tax cuts for wealthy people right now, when the priority needs to be on everyday households.’
The news follows as the tax cuts in the mini-budget was criticised by the International Monetary Fund (IMF) on Friday, which warned it would stoke ‘inequality’ and risked increasing interest rates, as well as benefitting high income earners.
The Bank of England also reacted with a £65bn emergency intervention in temporary and targeted purchases in the gilt market to restore ‘orderely market conditions’ and prevent a ‘material risk’ to UK financial stability.
Jamie Morrison, head of tax at accountancy firm HW Fisher, said: ‘It was a bold move by the Chancellor to cut the top rate of income tax in his mini-budget – and one that has not paid off.
‘Tackling the UK’s cost of living crisis should be the government’s top priority, and it was hard to see how the abolition of the 45p tax rate would have benefitted anyone apart from the UK’s highest earners.’
The pound jumped against the dollar in overnight trading on Monday as reports emerged that the government would abandon the decision to axe the 45p tax rate.
Sterling hit $1.125, recovering to levels before the mini budget, but slumped back in early morning trading to $1.119.
Christy Wilson, associate at Katten UK LLP, said: ‘The removal of the 45% income tax rate was not anticipated before the budget. There was discussion that the Chancellor may announce some amendments to the income tax rates, including the higher rate income tax threshold being moved to £80,000 – but the removal of the 45% tax band was unexpected.
‘Even though the government has maintained since the budget that the tax cuts were the correct approach for economic growth, it is not surprising that the government felt compelled to make some amendments to the announced tax cuts given how serious the backlash to the budget has been.
‘The concerning element of this ‘u-turn’ is that only a couple of days ago Liz Truss and the Chancellor maintained that cutting the 45% income tax rate was the right thing to do, but now they have abandoned these plans. This calls into question other tax cuts that were announced – will these be reversed too?’
Paul Johnson, director of the Institute for Fiscal Studies (IFS), added that the decision to scrap the 45% rate on earnings was the ‘smallest part’ of the mini-budget, representing around £2bn of the £45bn in tax cuts.
‘The direct impact of the government’s U-turn on the abolition of the additional 45p rate of income tax is of limited fiscal significance. At a medium-run cost of around £2bn a year, it represented only a small fraction of the Chancellor’s mini-budgest announcements. His £45bn package of tax cuts has now become a £43bn package – a rounding error in the context of the public finances.
‘The Chancellor still has a lot of work to do if he is to display a credible commitment to fiscal sustainability. Unless he also U-turns on some of his other, much larger tax announcements, he will have no option but to consider cuts to public spending: to social security, investment projects, or public services.’
The UK economy saw growth of 0.2% in July, following a sharp fall of 0.6% in the previous month, according to the Office for National Statistics (ONS)
The UK economy grew slower than expected in July as worker shortages and inflation weighed heavily on activity amid the growing risk of recession.
According to the ONS, gross domestic product (GDP) rose by 0.2% in July, after a sharp fall of 0.6% in June 2022. Though 1.1% above pre-coronavirus levels, GDP was flat in the three months to July compared with the previous three months.
The services sector was the biggest contributor to growth, seeing a rise of 0.4%, following a 0.5% drop between May and June.
Yael Selfin, chief economist at KPMG UK, said: ‘The feeble 0.2% bounce back in July was driven by weak GDP in June due in part to the loss of working days from the Jubilee long weekend.
‘More concerning, July’s GDP remains below the level seen in May, pointing to an overall contraction over the first two months of summer.
‘This ties into a downbeat outlook for the UK economy which could see another shallow recession from the end of this year, driven by the ongoing squeeze on households’ income and a rising cost burden for businesses
‘While nearly £170bn worth of fiscal measures announced last week may be sufficient to avoid a deeper economic slump, these will be partly offset by tighter Bank of England monetary policy focused on combating the high levels of inflation.’
The figures come amid growing concerns over Britain’s economy as soaring inflation and rising costs weigh heavily on households and businesses. The Bank of England warned that the UK will likely fall into recession at the end of the year, which could last until early 2024.
The information and communication sector grew by 1.5%, the largest contributor to services growth in July. The main driver was computer programming, consultancy, and telecommunications.
Production fell by 0.3% after a fall of 0.9% in June, mainly because of a drop of 3.4% in electricity, gas, steam, and air conditioning supply.
Jake Finney, economist at PwC, said: ‘Looking beneath the headlines, it’s clear this positive growth rate was primarily led by the performance of the services sector. Two of the other main engines of economic growth – production and construction – contracted in July.
‘Despite today’s positive growth figures, our expectation is that the UK economy will contract in the third quarter of 2022, following its 0.1% contraction in the second quarter. This would mean that the UK enters a technical recession for the first time since lockdown restrictions ended.’
Following weeks of hustings and debate, the members of the Conservative party have elected Liz Truss as their party leader and new prime minister
The popular vote was won by home secretary Liz Truss with 57% of the vote with a share of 80,326 votes, while former chancellor Rishi Sunak took 43% at 60,345 votes.
In a short speech before MPs, Truss promised to govern as a Conservative for the next two years, prioritising cutting taxes and dealing with the energy crisis, long term energy supply issues, and National Health Service.
In earlier interviews, Truss said that she would set out her economic plans within the next week to address the energy crisis and cost of living issues.
The official handover will take place at Balmoral when the Queen invites Truss to form the new government following the resignation of Boris Johnson.
The new Cabinet will be confirmed in the next few days with key appointments likely to be confirmed late on Tuesday.
In contrast to her opponent Sunak, Truss has focused on tax cuts as a central plank of her policy.
Simon Rothenberg, a director at Blick Rothenberg, said: ‘Liz Truss has led with the promise of significant tax cuts such as the reversal of Rishi Sunak’s 1.25% National Insurance, likely to be targeted at basic rate taxpayers only.
‘Truss is also said to be favouring a substantial increase to the basic rate threshold, possibly as high as £80,000 – a promise Boris Johnson led with during the 2019 Conservative Party leadership campaign but never materialised during his tenure. These will help, but they are not immediate fixes.
‘I expect a budget in the coming weeks with a lot of promises before this around helping households with energy prices and the cost-of-living crisis – help is urgently needed, and it will be at a very significant cost to HM Treasury.
‘There was little or no promise to help, in the immediate future, the businesses who are being crippled by the complete lack of any energy price cap – tax cuts (including stopping the proposed increase in corporation tax to 25%) and a stronger economy will help tomorrow, but they need help today.
‘Pubs, restaurants, shops, hairdressers, along with all other businesses, are receiving their energy bills which, in some cases, show over a 500% increase over the previous bills. This is before they head into winter and while temperatures are still mild.
‘Without any targeted support I fear our retail and hospitality sector will severely struggle over the winter months as households reduce their discretionary spend to afford their own increased prices.’
The package of tax cuts promised in Truss’ campaign appealed to Conservative voters but will be costly to implement without cutting public services to balance the books.
Adrian Young, a tax partner at Hurst, said: ‘Ultimately, the real challenge the new prime minister will face is to maintain public services while delivering tax cuts. The ones she proposed on the hustings alone have been costed at £30bn in some estimates. It was no doubt easy to make these promises as part of a plan to win the premiership.
‘However, the reality for Truss of managing the public finances in the current economic climate will be much more problematic.’
he level of financial distress in companies jumped by 37% in the last quarter compared to the same period last year
Bars and restaurants, retailers and construction sectors were the main sectors affected by tough trading conditions, with year-on-year rises of 70%, 48% and 36% respectively.
The latest Red Flag alert from Begbies Traynor showed that the number of companies rated as being in ‘critical financial distress’ continued to rise, increasing by more than a third in Q2 2022 – edging up 3% compared to Q1 2022.
Julie Palmer, partner at Begbies Traynor, said: ‘Having emerged from the pandemic, many companies were hoping for an economic boom but that has simply fizzled out, as supply chain issues and the invasion of Ukraine have taken their toll by driving up raw material and energy costs and reducing both business and consumer confidence.
‘We are now in a very high inflationary environment that’s piling pressure on businesses that were already weakened by the shock of the pandemic.
‘Sectors most exposed to discretionary consumer spending – bars and restaurants, and general retailers – are feeling the pain most.’
SMEs are also affected, with more than 582,000 companies in significant financial distress, although this figure was unchanged from the previous quarter.
Businesses continue to be impacted by rising inflation, far exceeding the official rate of more than 9%. With high labour, material and energy prices and faltering consumer and business confidence, companies are facing a difficult economic backdrop.
Palmer added: ‘I am also particularly concerned for those SMEs who operate in energy-intensive sectors, such as manufacturing, as some could simply become unviable. Without the benefit of an energy price cap, business energy tariffs have at least trebled, and for many it will be much worse.’
Evidence of this financial distress comes from county court judgement (CCJ) data, which revealed 46,235 rulings in the first six months of 2022, up 5% on the first quarter, as creditors tried to recover debt – there were 59,042 CCJs during the whole of 2021.
CCJs are leading indicators of insolvency, and as the courts return to normal, there are fears this number could rise much further.
Sectors with the highest number of critically distressed businesses include construction, real estate, general retailers and restaurants, automotive and industrial transportation.
Ric Traynor, executive chairman of Begbies Traynor, said: ‘The combination of macro-economic risks is now taking its toll on UK businesses, as evidenced by this latest Reg Flag Alert data.
‘With inflation nearing 10%, and showing little sign of abating, there can be no doubt that things are going to get worse for UK businesses before they get better. This, combined with a deteriorating geo-political landscape, is likely to have serious consequences for the UK economy.
‘Rising insolvency rates, combined with our own evidence from speaking to the directors of distressed companies, highlight the impact of rising costs on businesses. The very same directors, who benefited from government-backed Covid support loans to get them through the pandemic, are now telling us that they are simply unable to repay these debts, plus they are having to deal with rising wage demands and higher input costs.’
The government has set out details of how the £400 energy bill subsidies will be paid to customers and is trying to get them classified as discounts
This is part of the £11bn energy support package announced in the spring when energy prices started to escalate with the price cap breaking £2,000.
Millions of households across the country will receive non-repayable grants on their energy bills this winter over a six-month period starting in October. The money will be credited to bills by energy providers in six payments of £65 for two months, then £67 for four months from December to March.
The original plan launched by former Chancellor Rishi Sunak in May was to pay the grants in a single payment in October 2022.
Kwasi Kwarteng, business secretary, said: ‘People across the country are understandably worried about the global rise in energy costs, and the pressure this is placing on everyday bills.
‘While no government can control global gas prices, we have a responsibility to step in where we can and this significant £400 discount on energy bills we’re providing will go some way to help millions of families over the colder months.’
The £11.7bn scheme will help around 29 million households across the UK.
Repayment meter customers will be given an energy bill discount voucher in the first week of each month, issued via email, SMS text or post. These will have to be redeemed at top-up points.
Nadhim Zahawi, Chancellor, added: ‘This £400 off energy bills is part of our £37bn of help for households, including eight million of the most vulnerable households receiving £1,200 of direct support to help with the cost of living.’
The scheme will also apply to tenants renting properties with domestic electricity contracts from landlords where energy costs are included in their rental charges. Landlords must pass on the discount received to each tenant, and comply with Ofgem’s maximum resale price rules.
Further funding will also be available to provide support of £400 for the 1% of households who will not be reached through the scheme, including those who do not have a domestic electricity meter. Further details will be announced this autumn.
The government will work with Ofgem and suppliers ahead of the scheme’s implementation from October. This will include a strict reporting requirements for suppliers, which will be published in the near future.
In a bid to tackle the cost of living crisis, the Chancellor has announced a £15bn package of support with one-off payments for pensioners and lowest income earners, and doubled the £200 energy bill support
The measures will see one-off payments of £650 for low income earners, £300 for pensioners and a further £150 for disabled people.
Stressing that the energy crisis was affecting the majority of people in the country, he also changed the £200 loan for electricity bills, doubling it to £400 and removing the requirement to pay it back.
Chancellor Rishi Sunak said: ‘To help with the cost of living we are going to provide significant targeted help to those with the lowest incomes, pensioners and the disabled. We will send directly to eight million of lowest income households a one-off payment of £650. The DWP will make the payment in two lump sums, in July and later in the year, and HMRC will make payments to those on tax credits.
‘There is no need for people to fill out complicated forms or bureaucracy – we will send the payment straight into their bank accounts.’
The package also includes support for pensioners and disabled people.
‘From the autumn, we will send over eight million pensioner households who receive the winter fuel payment – an extra, one-off pensioner cost of living payment of £300,’ the Chancellor said.
‘Disabled people also face extra costs in their day-to-day lives – like having energy-intensive equipment around the home or workplace.
‘So, to help the six million people who receive non-means tested disability benefits, we will send them, from September an extra, one-off disability cost of living payment, worth £150.
‘Many disabled people will also receive the payment of £650 I have already announced, taking their total cost of living payments to £800.
‘The most vulnerable will receive support of £1,250.’
The Chancellor also confirmed that benefit payments will rise in line with the September 2022 CPI figure for payments starting in April 2023. In addition, the triple lock will apply to state pensions.
Recognising the extent of the cost of living crisis, the £200 loan for electricity users becomes a grant, and the amount will be doubled to £400 from October.
‘The plan was to provide all households with £200 to help with bills, which was repayable. This support is now unambiguously a grant and the support will be doubled to £400 and not a penny to repay,’ he said.
Energy suppliers will deliver this support to households with a domestic electricity meter over six months from October. Direct debit and credit customers will have the money credited to their account, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher.
This support will apply directly for households in England, Scotland, and Wales. It is GB-wide and there will be equivalent support for people in Northern Ireland.
‘We are raising emergency funds to help millions of the most vulnerable families who are struggling right now,’ the Chancellor said. ‘And all households will benefit from universal support for energy bills of £400 – with not a penny to repay.
‘In total, the measures I’ve announced today provide support worth £15bn.
‘Combined with the plans we’ve already announced…that means we are supporting families with the cost of living to the tune of £37bn or 1.5% of GDP. That’s higher or similar to countries like France, Germany, and Italy.’
Robert Pullen, a partner at Blick Rothenberg, said: ‘After weeks of denials, delay and dithering, the government finally announced a spate of cost-of-living support measures today, ranging from giveaways of £650 per household to converting the previously announced discount on energy bills from a loan to a grant.
‘The total cost of all the measures announced this year is now estimated by HM Treasury to be £37bn, which is equal to the total income tax paid through self-assessment tax returns for 2021/22.
‘Rishi also appears to have learnt from the calamitous administration problems created with previous measures, as we are told the process and paperwork will be far simpler.
‘However, the devil is in the detail and it is possible that many other individuals could miss out on support entirely or receive very little.
‘Whether Rishi will announce further support, or changes to the tax system more widely such as a speculated reduction in the income tax rate or increases to the long frozen basic rate band, which is being severely eroded by inflation, remains to be seen.’
Nigel Morris, employment tax director at MHA, said: ‘While the government has lived up to their promise of evolving their response to the cost of living crisis, as demonstrated by a windfall tax on energy companies and the UK’s energy bill grant doubling to £400, a more rapid rethink on taxes and businesses incentives is urgently required to prevent an impending recession.
‘Reducing the standard National Insurance contribution (NIC) rate back to 12% and lowering the income tax rate from 20% to 19%, even if only temporarily, would provide some much-needed relief for businesses and families across the UK. As demonstrated by the temporary VAT cut from 17.5% to 15% to tackle the 2008 financial crisis, short-term solutions can be highly effective to introduce vital relief and should be considered in the current climate.’