UK Financial Reforms and Regulatory Updates 2025-2030

Vicky

Hello everyone and welcome to this weeks AI podcast! As some of you may know, it's a special week here in the B-hive... it's our 7th Birthday! Back in 2018 B-Compliant took it's first tentative steps into the world of Compliance Consultancy.

Rachel

It was, Happy Birthday to us. Cake was eaten, and commemorative photos where taken for our social media... it was definitely worth a trip into the office. Did you ever think this time 7 years ago, you would be dabbling in AI podcasting, as well as supporting clients with all things compliance?

Vicky Pearce

We've come a long way in 7 years. Now the celebrations are out of the way, we are talking about the Spring Budget, and whilst there wasn't any earth-shattering changes, there’s plenty for financial planners and advisers to think about, especially around taxation and investment reforms.

Rachel MacRae

Absolutely, Vicky. And you know what? I think the ISA simplification bit is really interesting. This whole idea of striking a balance between cash and stocks shares investments—it could be a game-changer for retail investors, don’t you think?

Vicky

It really could be. The government seems to be aiming for a system that’s simpler and more accessible, which, honestly, might nudge more people into retail investing. The devil’s in the details, though, as always—

Rachel

Always!

Vicky

—but if they get it right, we could see a shift towards stronger investment engagement among, well, your average person, rather than it being predominantly savvy investors or professionals.

Rachel

And that’s such a positive move, isn’t it? But shifting gears a bit, the changes to non-dom taxation. I mean, they’re going for a full residence-based framework by 2025. That’s huge.

Vicky

It really is. The idea is to maintain the UK’s competitiveness, but... it’s not going to be an easy adjustment for firms or advisers used to the current rules.

Rachel

No, definitely not. But, honestly, they’ve given some leeway with the timeline, right? So, advisers and their clients have time to start preparing now.

Vicky

Exactly. Planning ahead will be key. And we can’t ignore how this might attract—or maybe deter—certain types of international investors. It’s a balancing act.

Rachel

It is. And speaking of balance, let’s talk about VCTs and EIS. The statement reaffirmed their commitment to supporting entrepreneurship and scale-ups, which is great. No immediate changes, though?

Vicky

Not yet, but they’ve promised further engagement with stakeholders before the Autumn Budget. So, if you’re an adviser with clients looking at venture capital or enterprise investment schemes, now’s the time to stay close to the updates.

Rachel

Absolutely—and possibly get involved in those round-tables the government mentioned. They want that collaboration, don’t they?

Vicky

They do. And it shows they’re considering the industry’s voice in shaping policies. That’s encouraging, but it means staying proactive from here on out.

Vicky

Now, Rachel, speaking of staying proactive, the FCA’s Consumer Duty updates are a perfect example. They’re putting real emphasis on reducing regulatory complexity, aren’t they?

Rachel

Oh, massively! I mean, their Feedback Statement FS25/2—it’s a bit of a mouthful, isn’t it? But their commitment to simplifying rules is clear.

Vicky

It is. And they’ve outlined this whole phased approach with four strategic themes. The first one, “Reviewing the Foundations,” is particularly interesting. They’re reassessing how rules apply across different customer types, including international ones.

Rachel

Right—like the focus on insurance conduct rules and definitions like “retail customer” and “SME.” It’s about time they addressed those inconsistencies.

Vicky

Honestly, yes. And they’re even looking into mortgage advice and lending rules. There are consultations planned to encourage, let’s say, more innovation and flexibility in those areas.

Rachel

Which is, you know, exactly what's needed. Mortgage processes can feel so... rigid at the moment. Making it more adaptable could really help consumers make better choices.

Vicky

Absolutely. Then there’s “Future-Proofing Disclosure.” This theme dives into making regulatory disclosures more relevant to modern consumer needs—especially in digital journeys.

Rachel

Oh, I love that. The blend of, like, simplifying things but also keeping up with how people consume information digitally? hopefully a move in the right direction for consumer understanding.

Vicky

It’s long overdue, though, isn’t it? They’re also planning reforms for mortgage and consumer credit disclosures and rethinking those rigid APR rules. A new framework for product information around Consumer Composite Investments is on the radar too.

Rachel

Yeah, but the big goal there is to enable firms to actually tailor communications better, right? It’s all about making the message clear for customers.

Vicky

Exactly. And the third theme—this might interest firms the most—it’s all about “Reducing the Administrative Burden.” They’re suggesting more flexibility in how regulatory requirements are met, like simplifying record-keeping and easing some product value assessment processes.

Rachel

Oh, that’ll be a relief!

Vicky

It definitely could be, as long as they maintain consistency. Now, the final theme, “Streamlining Requirements,” it’s about cleaning house—retiring outdated guidance and improving the clarity of the Handbook.

Rachel

Streamlining always sounds good on paper, Vicky, but—

Vicky

But execution is everything, right?

Rachel

Exactly. Still, I think the pilot guide for smaller firms they’ve mentioned could be helpful. And making the online rule review tool better—finally!

Vicky

It’ll be interesting to see how firms adapt, especially with the FCA leaning into principles-based regulation. It’s more about judgement now, evidencing fair outcomes for customers. That’s a significant shift in approach.

Rachel

It really is. Firms are gonna need to rethink their internal processes, aren’t they?

Vicky

They will. It’s about embedding governance that shows you’ve got fairness built-in, not just ticking boxes.

Rachel

And you know, Vicky, this whole push toward clearer, simpler rules? It’s just... it’s gonna take a real cultural shift for some firms to fully embrace it.

Vicky

That’s true. But if they do, it should lead to better outcomes for everyone involved—customers and firms alike.

Rachel

You know, Vicky, speaking of adapting to major changes, Making Tax Digital for self-employed folks and landlords is another big one. It’s officially kicking off in 2028—which, honestly, feels like ages away, doesn’t it?

Vicky

It does, but, honestly, these changes always sneak up on us quicker than we’d expect. And with 500 new staff being added, enforcement is definitely going to ramp up. It’s time for businesses to start preparing.

Rachel

True, especially with those new penalties for late payments, yikes! People are going to are gonna get caught out if they wait till the last minute.

Vicky

Exactly. And it’s not just about preparing for the tech and reporting changes—it’s also about creating processes that help firms stay on top of it efficiently.

Rachel

And speaking of efficiency—or the lack of it—should we talk about fiscal drag? Those frozen thresholds for CGT and income tax are gonna quietly hit people hard, aren’t they?

Vicky

Absolutely. Even though there weren’t any changes announced, the impact of inflation means more taxpayers will be dragged into higher bands over time. For advisers, it’ll make those annual reviews with clients even more critical to keep planning up to date.

Rachel

Right, especially balancing income tax planning with CGT strategies. Clients are gonna need our help to navigate what might feel like stealth tax increases. It’s a challenge, but also an opportunity.

Vicky

It really is. And on that note, Rachel, I think we’ve covered a lot today—from the Spring Budget to FCA updates and wrapping up with compliance challenges ahead.

Rachel

We have! It’s been packed, hasn’t it? I think it's time for another slice of B-Compliant Birthday Cake.

Vicky

Now that is not a bad shout! I just wanted to take a moment to thank all the firms we have worked with over the last 7 years - we wouldn't be here today without you.

Rachel MacRae

Absolutely! And for everyone else listening, thanks for joining us. We hope you found today’s discussion helpful. Remember, staying informed is the first step to staying compliant.

Vicky Pearce

And staying sane while doing it!

Rachel MacRae

Exactly! Until next time, take care and be compliant!