Business news 3 April 2025
Trump announces 10% baseline tariff. Business closures surge in Q1. Tax, wages, fraud, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Please note: on the 19/3/25 CPA moved after 45 years on King Street, to new offices a couple of miles down the road at Profile West, 950 Great West Road, Brentford, TW8 9ES.
Trump announces 10% baseline tariff
President Donald Trump has set out plans for new import taxes on all goods entering the US, with a baseline tariff on all imports of at least 10% and higher rates for countries that the White House described as the “worst offenders.”
Trump said the US will calculate the combined rate of all other countries tariffs and “charge them roughly half of what they are charging us.” Brandishing a chart at the White House, Trump said the UK will face a 10% tariff, which will be the baseline, the EU 20% and China 34%.
Trump lumped in VAT as a tariff on its imports to the UK despite the fact that VAT is a tax added to supplies from domestic producers too and not just imports, ignoring the fact that there are sales taxes in the US too.
Donald Trump’s shake-up of the global trading system is hurting US assets more than those in many of the big economies he has just slapped with additional tariffs. US equity index futures are tumbling along side the US Dollar which is falling hard.
Officials say the 10% tariffs will come into force on April 5, with the higher duties starting on April 9. While goods from the UK are set to face a new 10% tariff, import taxes on items from the EU will be set at 20%. Nations facing the highest charges to import goods to the US include China (34% – taking the total to 54%), India (26%) and Japan (24%). Mr Trump has also confirmed the additional 25% tax on imports of all foreign-made cars.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the “plan for blanket tariffs on US trading partners has unnerved investors,” adding: “As Trump has ripped up trade norms, it’s spread fresh worries about the implication for the global economy.” The National Institute of Economic and Social Research think-tank has warned that the US tariffs could knock UK growth down to zero next year, noting: “Even if the UK were exempt from these tariffs, economic activity could still suffer due to broader global disruptions.”
Business closures surge in Q1
Almost 3,000 companies closed in the opening quarter of 2025, marking the highest number of closures since the pandemic. A total of 2,718 companies shut down between January and March, with this the highest first quarter total since 2021, when 5,133 notices of liquidation were filed. Analysis shows that 382 notices of liquidation were published in January, with 637 in February and 1,699 in March. It has been suggested that tax hikes set out in October’s Budget have played a part in the increase of corporate closures, with Daisy Cooper, the deputy leader of the Liberal Democrats, saying: “Businesses up and down the country have just been getting by for years but may now have to shut up shop thanks to the Chancellor’s misguided jobs tax.” Shadow Chancellor Mel Stride, meanwhile, said: “The Chancellor’s anti-business Budget is pushing businesses to the brink.” Sam Bidwell, director of research at the Adam Smith Institute, said the scale of closures was “shocking but not surprising,” adding that it is now “incumbent upon the Government to take action” by reducing the tax burden, cutting red tape and bringing down energy prices.
Tax plans will deliver £400 income hit
The average working household in the UK is projected to be £400 worse off this year due to a combination of factors, including a freeze on the income tax threshold and increased National Insurance contributions for employers. Analysis by the Resolution Foundation warns that the poorest half of the workforce could see a 3% decline in disposable income over the next five years, equating to about £500 per household. The think-tank highlighted that a freeze on personal tax thresholds would push more earners into higher bands and a hike in employer National Insurance is set to stifle wage growth. Adam Corlett from the Resolution Foundation said: “The new tax year has arrived, and brings with it higher taxes, even larger bill increases, and benefits that aren’t keeping pace with the rising cost of living.” Rising utility bills and council tax increases further exacerbate the financial strain on households, with many local authorities raising council tax by the maximum allowed.
Chancellor defends tax hike
Rachel Reeves has defended the £40bn in tax increases set out in last October’s Budget, saying that without the hikes, NHS waiting lists would be even longer. The Chancellor said ministers increased National Insurance contributions and put £25bn extra investment into the NHS, adding: “We think that was the right priority.” As of April 6, employers face a £25bn increase in National Insurance contributions. While business groups have warned about that the hike – alongside the 6.7% increase to the national living wage for people aged 21 and over – makes job losses likely, Ms Reeves said labour market data shows that wages are growing at twice the rate of inflation and vacancies “have stabilised at a relatively high level.” This, she said, “gives confidence that businesses do want to carry on hiring.”
Wage growth falling for low-paid workers
Analysis by jobs website Indeed shows that wage increases among low-paid workers are at the lowest level in three years. Annual pay growth for low-wage jobs stood at 6.2% in February, with this down on the 6.8% growth recorded in January and the lowest level since early 2022. Jack Kennedy, a senior economist at Indeed, noted: “For some time now, low-paid sectors have been seeing significantly stronger pay growth than the rest of the market,” but warned that higher employment costs are having an impact on firms that employ lower-paid staff. This comes as firms brace for an increase in employers’ National Insurance contributions.
APP fraud hits £3bn
A report by the All-Party Parliamentary Group on Fair Banking suggests that fraud through Authorised Push Payments (APP) stands at around £3bn a year. This far exceeds the £341m losses calculated by the Payments Services Regulator and £460m estimate from UK Finance. The report, sponsored by fraud recovery solicitors Richardson Hartley Law, took existing figures from the Payment Services Regulator and UK Finance, as well as other anti-fraud groups such as CIFAS, and applied industry standard estimates for the proportion of fraud that goes unreported each year.
Markets
Yesterday, the FTSE 100 closed down 0.3% at 8608.48 and the Euro Stoxx 50 closed down 0.31% at 5303.95. Overnight in the US the S&P 500 rose 0.67% to 5670.97 and the NASDAQ rose 0.87% to 17601.05.
The Prime Minister, Kier Starmer says he ‘rules nothing out’ and is preparing for all eventualities ahead of Trump’s tariff announcement. At PM Question Time the PM was downbeat at the prospect of striking an exclusive trade agreement with the US. The PM said Northern Ireland will be at the forefront of the UK tariff response. EU Commission said the EU will deliver a two step response, the first dealing with steel and aluminium tariffs and the second everything else.
Stockmarkets plunged in response to Mr Trump’s announcement. In Asia major indices in China, Japan and South Korea all fell during early trading. In America after-hours trading in S&P 500 futures dropped by more than 3%.
China called on “bullying” America to immediately cancel the new tariffs, vowing “resolute counter-measures”. Ursula von der Leyen, the EU Commission’s president, called Mr Trump’s move a “major blow to the world economy”, saying it would be “dire for millions of people around the globe”. Japan called the new levies “extremely regrettable”. Australia’s prime minister decried the “poor decision”, but said he would not retaliate.
Following the tariff’s announcement, this morning on currencies, the pound is currently worth $1.318 and €1.192. On Commodities, Oil (Brent) is at $71.9 & Gold is at $3117. On the stock markets, the FTSE 100 is currently down 1.2% at 8500 and the Eurostoxx 50 is down 2.35% at 5179.
Amazon have reportedly submitted a bid to buy Tik Tok ahead of the deadline this weekend for it to find a US buyer or be banned from the US market.
Tesla
Tesla announced global Q1 deliveries of 336.6k below consensus of 390k a 32% decline quarter over quarter. The numbers suggested a very weak US performance in addition to slumps in western Europe. BYD, a Chinese firm, recently overtook Elon Musk’s carmaker as the world’s biggest electric-vehicle firm by sales. Consumers have boycotted Tesla over Mr Musk’s support for Donald Trump.
Whistleblowing on the increase
Whistleblowing reports increased by 16% year-on-year in 2024, according to Safecall, an agency specialising in reporting. The data shows that one in five (19%) reports were related to dishonest behaviour, with this marking a record high. Joanna Lewis, managing director of Safecall, described the findings as both “positive and negative,” saying: “The higher levels of whistleblowing may indicate that there is increased wrongdoing – but it also indicates that there is higher levels of reporting confidence, which is good.”
BTL loans increase in Q4
The number of buy-to-let loans increased by 39.2% year-on-year in the final quarter of 2024, according to UK Finance figures. The data shows that 52,648 new buy-to-let loans were advanced, with these worth a combined £9.6bn. This means the value of loans was up 47.2% compared Q4 2023. The average interest rate across all new buy-to-let loans was 5.09% in Q4 2024, with this 0.61 points lower than in the same quarter of 2023. Richard Donnell, executive director at Zoopla, attributes the increase in borrowing recorded in Q4 2024 to global uncertainty and weaker equity markets, “with residential coming back into the thinking of cashflow-focused landlords.”
Investors opting for Stocks and Shares ISAs
Analysis of HMRC data by Investengine shows that while fewer investors are opting for Cash ISAs, there has been a 57% increase in Stocks and Shares ISAs. New Cash ISA accounts have fallen by 7% over the last five years. The data also shows that the amount held in Stocks and Shares ISAs increased by 37% between 2018/19 and 2022/23, compared to 9% for cash ISAs. The £431bn held in Stocks and Shares ISAs is 46% higher than the £294bn held in cash ISAs. Experts expect ministers to reform the ISA system in the Autumn Budget, with it reported that the Chancellor had been considering cutting the cash ISA limit from £20,000 to £4,000 ahead of last month’s Spring Statement.
Latest Insolvencies
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Why you should become a member of CPA!
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid, since 1914. We have supported our members through all sorts of difficult trading environments. With high interest rates and a struggling economy and elevated insolvencies, our services can help your business navigate these difficult waters.
Unlike other credit management and debt collection companies, we offer a range of services to our members that are all included as part of a fixed annual subscription, tailored to your needs.
Under your annual subscription you will have access to our main services:
- Our Creditcare credit reports provide credit ratings and limits along with a host of detailed information on your potential customers to enable you to trade with confidence and set appropriate credit policies for new customers.
- Our monitoring service will alert you to any significant changes in the status of those customers.
- Our Overdue account recovery service can be used to chase up payment on any invoices to those customers that have not been paid on time. Unlike other debt collection companies, this service directs your customer to pay direct to you and allows you to maintain your goodwill with them, rather than inserting ourselves into your relationship with you customer and insisting they pay CPA instead. Our Overdue account recovery service resolves over 80% of accounts referred to us.
All of the above services and other complimentary services such address verification, are included in your subscription!
And for the small minority of debts not resolved through our Overdue account recovery service, you can refer the debt to our collections department to escalate the late payment collections process.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. And we provide credit information so you can monitor and assess your key customers and be warned of any potential risks. CPA has been improving business cash flow for over 100 years, by tackling late payers and campaigning against the late payment culture in the UK.
Unlike other credit management companies, we offer our members a fixed annual subscription regardless of how high the value of their debts maybe!
Rather than to borrowing more money to improve your cashflow, CPA suggests that business owners tackle the problem at its source. If late payments are a strain on your cashflow, then talk to CPA about how we can help you reduce those late payments.
Just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you have a commercial late payer that is causing you grief? Use CPA’s no-win, no-fee, commercial debt recovery service!
If you have a particular business customer who is late paying and causing you sleepless nights, why not offer it to CPA’s collection department for purchase on recourse?
CPA’s collection department will then pursue the debt. We will be liable for any costs incurred and then when we have recovered the debt, we will pay you the net principle debt recovered less our percentage.
Once you have enjoyed that success then you can consider the more cost effective membership which includes our Overdue Account Recovery service and Status/Credit reports as well as a range of other complimentary services.
Just call 020 8846 0000 and ask for Godfrey Nelson or Cris Shirley (business hours) or email debtpurchase@cpa.co.uk today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.
Get compensated for previous late payments
Have you been paid late by business customers in the last six years?
Maybe you no longer work with them. Under legislation, you are entitled to compensation you for those late payments you have suffered.
You put up with the PAIN – now claim the GAIN!
Claim late payment compensation (LPC) from former business customers who paid you late in the last six years!
CPA (LPC) Recoveries is using our bespoke software and decades of experience to do just that for our clients
Check our compensation calculator to see how much your business could be owed!
Discover NOW the potential value of late payment compensation hidden in your sales ledger!