Money Covered: The Week That Was – 30 October 2026

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

The sixth episode of Season 4 of our podcast, Money Covered – The Month That Was, where the team looks at the FCA’s proposed section 404 consumer redress scheme for vehicle finance, is now available.

To listen to this and all previous episodes, please click here.

Headline development

Autumn Budget 2026: implications for financial services, pensions, tax and regulation

Chancellor John Healey’s Autumn Budget 2026 combines targeted support for households and selected businesses with higher tax burdens for certain institutions, investors and business owners.

For the financial services sector, a key measure is a temporary 3% surcharge on banks for 15 months from January, intended to fund energy support. Household measures include extending the temporary VAT reduction on electricity (cutting the rate from 5% to zero until July), confirming the removal of the gas standing charge, and providing a £100 payment for households in Council Tax bands A to D. For motorists, the 5p-per-litre fuel duty cut is extended until July, and the higher mileage rate rises from 25p to 35p per mile.

In pensions, the Government plans a new Pension Tax Allowance so individuals whose income does not exceed the State Pension do not pay income tax. Further detail will be needed, particularly for retirees with mixed income from the State Pension, private pensions and savings. The Budget also anticipates changes to the triple lock, with long-term savings projected by the end of the 2030s.

For businesses and investors, business rates relief for retail, hospitality and leisure SMEs will expand (with the threshold rising from £12,000 to £18,000), funded by higher gambling taxes. Business Asset Disposal Relief will be tightened, halving the lifetime limit from £1 million to £500,000. From April 2027, income tax rates on savings and property income will rise by two percentage points. HMRC will receive more funding and stronger debt-collection powers, likely increasing compliance activity.

Finally, the government plans to introduce 'founder's relief', a new relief in capital gains tax for the founders of "our most successful firms".  The relief will apply a 10% rate of CGT to qualifying disposals of shares, up to a lifetime limit of £10 million of gains per individual.  There will therefore be plenty of issues for taxpayers and their advisors to wrestle with over the coming weeks and months.

Click here to read the Government's Budget document. 

Auditors

FRC revises auditing standards on non-compliance with laws and regulations

The Financial Reporting Council (FRC) has revised two UK auditing standards to strengthen audit quality and clarify auditors’ responsibilities when assessing risks arising from non-compliance with laws and regulations. The revisions aim to establish a more proportionate, risk-based approach, enabling auditors to apply professional judgement rather than follow a prescriptive checklist.

The revised standards are ISA (UK) 250, Consideration of Laws and Regulations in an Audit of Financial Statements, and ISA (UK) 270, which addresses communicating and reporting matters to appropriate authorities outside the audited entity. The changes remove the distinction between direct and indirect laws and regulations, focusing instead on those that may reasonably give rise to risks of material misstatement. They also clarify that auditors are not expected to identify every applicable law or conduct a comprehensive compliance review.

Furthermore, the revisions clarify auditors’ reporting responsibilities, including circumstances in which matters may need to be reported to more than one authority. The standards will apply to audits of financial statements for periods beginning on or after 15 December 2027.

To read the FRC’s announcement and access the revised standards, please click here.

Regulatory developments for FCA regulated entities

Changes for EIS and SEIS investors

Following the Government’s 2026 Budget, HMRC is to strengthen its guidance and compliance activity relating to fees charged in respect of Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS). The Government aims to address arrangements in which an excessive proportion of investment money is diverted away from qualifying companies through fundraising fees, intermediary charges and similar costs.

The Government considered introducing fee caps but decided against this approach, instead proposing to work with the investment industry and the FCA to improve the transparency and comparability of fees and investment terms. The measures are intended to help investors better understand the costs associated with tax-advantaged investments, while ensuring that businesses receive an appropriate proportion of the capital raised to support their growth.

Furthermore, HMRC will work with industry to improve the Advance Assurance service for EIS and SEIS companies. The Government also intends to provide clearer guidance to help businesses and investors understand the eligibility requirements for these schemes.

To read the article on the Government’s 2026 Budget changes for EIS and SEIS investors, please click here.

UK regulators propose simplifying senior managers regime

The Financial Conduct Authority (FCA) together with the Bank of England have recently proposed simplifying the Senior Managers and Certification Regime (SMCR), which they claim would save businesses £2bn each year.

The FCA proposes to simplify the SMCR by reducing the number of senior management functions, streamlining applications, and moving some roles from prior approval to a notification-only process (with notifications permitted up to three months in advance). It would also remove the “other overall responsibility” and “local responsibility” senior management functions and narrow the “group entity senior management function”. While these changes are intended to maintain accountability and conduct standards while reducing burden, the FCA notes that accepting some increased risk may be necessary, and it would retain a power to require approval in specific cases where it has governance or fitness concerns.

The FCA also proposes removing the certification regime for staff below senior manager level, instead relying on other existing requirements, while acknowledging this could increase risks to a limited extent. It would reduce conduct-rule breach reporting by raising the reporting threshold (estimated 30% reduction) and replace annual breach reporting with a longer reporting timeline. 

The FCA expects to publish final rules between January and June 2027, with changes taking effect six months later, and it has invited responses to the consultation by 22/01/2027.

The FCA's consultation paper on this issue can be read here.

Relevant case law updates

Court of Appeal provides guidance on change of position defence in unjust enrichment claims

On 7 October 2026, the Court of Appeal dismissed an appeal by Rasmala Trade Finance Fund against Trafigura Pte Ltd, providing guidance on the change of position defence to restitutionary claims in unjust enrichment. Rasmala had made payments totalling more than US$22.6m to Trafigura, believing that it was financing genuine coal supply contracts with a trader, Farlin. However, Farlin had forged the contracts and third-party agreements (TPAs), purportedly signed by Rasmala, authorising Trafigura to apply the payments towards Farlin’s existing debts. Trafigura subsequently continued trading with Farlin in reliance on the payments.

The Court of Appeal held that the change of position defence depended on the recipient acting in good faith, with mere negligence insufficient to defeat the defence. It also clarified that a sufficient causal connection could be established where the recipient acted on the faith of the payment, believing it was valid and could be treated as its own. Furthermore, risk allocation was not a separate requirement of the defence, and a substantial, irreversible lost opportunity could constitute a relevant detriment. The court concluded that Trafigura was entitled to rely on the defence and was not required to repay the sums received.

To read the Court of Appeal’s judgment in Rasmala Trade Finance Fund v Trafigura Pte Ltd [2026] EWCA Civ 1259, please click here.

With thanks to this week's contributors: Damien O'Malley and Dorian Nunzek.

If you have any queries please do get in contact with a member of the team, or your usual RPC contact.