Business news 3 July 2025
📉Tax concerns hit business confidence. 💷Financial advisers call for SME support. 🚨Minister commits to tax pledge but refuses to rule out hikes. 🧑💼Rate-setter calls for cuts. 📈Plus markets, 💣insolvencies & more 📰business news that we thought would interest our members.
James Salmon, Operations Director.
📉Tax concerns hit business confidence
Confidence among British businesses has significantly declined due to Labour’s tax policies, with a survey by the British Chambers of Commerce (BCC) revealing that 56% of firms are worried about their tax burden. While the number of firms that expect to put prices up over the next three years has fallen from 55% to 44%, the BCC has described overall confidence as “weak,” with less than half of firms forecasting an increase in turnover within the next 12 months. The BCC has urged the Government to avoid additional tax increases in the Budget. While Shevaun Haviland, director general of the BCC, noted that “the rising cost of doing business means confidence levels remain at their lowest levels since 2022,” David Bharier, head of research at the BCC, said: “April’s rise in National Insurance contributions has cemented tax as the dominant concern for firms.”
💷Financial advisers call for SME support
Financial advisers have voiced concern over a lack of support for small businesses in Government policy. A poll of advisers by alternative lender ThinCats saw more than half say Government policy is unsupportive of SMEs, while just 6% said it is supportive. The hike in employer National Insurance has put increased pressure on SMEs and the Federation of Small Businesses has warned that new workers’ rights rules, along with a higher minimum wage, could hit smaller firms and force them to reduce headcounts. Ravi Anand, managing director at ThinCats, said: “Given the UK has a bigger service-led industry, the NICs hikes and potential employment law changes have had a greater bearing
🧑💼Minister commits to tax pledge but refuses to rule out hikes
Cabinet Minister Pat McFadden has reaffirmed Labour’s commitment to its election promises on taxes, despite recent concessions on welfare reforms that jeopardise £5bn in savings by 2030. Mr McFadden said the Government “will keep to the tax promises that we made in our manifesto,” ruling out increases in income tax, National Insurance or VAT. However, he has refused to rule out increases in tax elsewhere. Asked on BBC Breakfast whether he could rule out tax rises, the Cabinet minister told the programme: “I’m not going to speculate on the Budget,” adding that “it doesn’t make sense for me to speculate on something where … there are so many moving parts of which this is only one element.” Separately, Mr McFadden told Times Radio that there will be “financial consequences” to the Government’s concessions on welfare budget reforms.
🧑💼Rate-setter calls for cuts.
Bank of England policymaker Alan Taylor has urged fellow Monetary Policy Committee (MPC) members to vote for faster interest rate cuts in a bid to deliver a “soft landing” for Britain’s economy. He suggested that more cuts will help steer price growth down toward the Bank’s 2% target. The MPC voted to hold interest rates at 4.25% in June, with inflation having risen to 3.4%. Mr Taylor has voted to cut interest rates in five out of seven MPC meetings since he joined in September.
🚨Budget gap could mean tax hikes
Analysts believe that Labour may impose significant tax increases following a U-turn over proposed welfare budget cuts. The Prime Minister’s plans, intended to save £5bn annually, have now resulted in an additional £100m in spending. Chancellor Rachel Reeves faces a substantial gap in her budget, which may necessitate further tax hikes, cuts to public spending, or increased borrowing. The Institute for Fiscal Studies’ incoming director, Helen Miller, said that with spending plans locked in, tax rises appear increasingly likely.
Non-doms hope for policy U-turn
️Wealthy non-doms are holding onto their UK properties rather than selling, amid hopes that Chancellor Rachel Reeves might reverse a decision to charge inheritance tax on global assets. Property agencies have reported a surge in clients requesting management of vacant homes, indicating they want to keep the option open to return if economic conditions become more favourable. Analysis suggests that if a significant portion of non-doms leave the UK, it could cost the Treasury up to £12.2bn, undermining the fiscal gains intended by the policy. Rachel de Souza of RSM said: “The extension of inheritance tax to include offshore trusts settled by non-doms was the key tax change that led to the exit of some ultra-high-net-worth individuals from the UK.” She added: “Confirmation that the assets in those trusts would continue to be protected from inheritance tax could see some of those who have left return, and may put a halt to the emigration of those who have not already left.”
📈Markets
Yesterday, the FTSE 100 closed down 0.12% at 8774.69 and the Euro Stoxx 50 closed up 0.69% at 5318.72. Overnight in the US the S&P 500 rose 0.47% to 6227.42 and the NASDAQ rose 0.94% to 20393.13.
The UK stock market was spooked after government bond yields spiked following suggestions that Rachel Reeves had lost the confidence of Keir Starmer, after his apparent refusal to back her in his weekly Commons questions. It was only later in the evening that Starmer gave her his full backing and said she would be Chancellor into the next election and for many years to come. Housebuilders suffered the heaviest losses, with Persimmon, Berkeley Group and Barratt Redrow falling 6.8%, 7.9% and 4.8% respectively.
UK Bond yields fell and bonds gained in response to Starmer backing Reeves.
National Grid shares fell on Wednesday after regulator Ofgem said it was launching an investigation into the Heathrow fire earlier this year after a report found it was caused by a preventable fault.
This morning on currencies, the pound is currently worth $1.367 and €1.158. On Commodities, ️Oil (Brent) is at $68.5 & Gold is at $3353. On the stock markets, the FTSE 100 is currently up 0.5% at 8818 and the Eurostoxx 50 is up 0.1% at 5324.
🚗Tesla
Tesla reported around 384,000 vehicle deliveries in the second quarter, a 14% decline from a year ago, and the second straight quarterly drop. The electric vehicle maker reported 443,956 deliveries and production of 410,831 vehicles during the same period last year.
🧑💻AI is reshaping the consultancy sector
Maria Ward-Brennan of City AM says the Big Four of Deloitte, EY, KPMG and PwC are cutting jobs and reducing graduate recruitment as they adapt to an AI-driven landscape. As competition intensifies, experts suggest that the Big Four must consider restructuring their consulting divisions to remain relevant. Tamzen Isacsson, CEO of the Management Consultancies Association, said: “AI is transforming consulting firms in profound ways,” indicating a shift towards specialised, tech-enabled roles. Ms Ward-Brennan says the consulting market is expected to become more fragmented, with smaller firms emerging as key players.
🚗FOS complaints surge amid motor finance row
Complaints to the Financial Ombudsman Service (FOS) have surged, with 305,726 recorded in the year to March 31, 2025. This is the highest total since the 388,392 seen in the year to March 2019, when the PPI scandal drove a spike in complaints. The latest increase comes amid the motor finance scandal, with the Supreme Court set to determine if banks unlawfully paid commissions to car dealers without customer consent later this year. Data shows that 73,328 complaints relating to motor finance were logged in the year to March 31. This marked a near-500% increase on the 12,604 recorded the year before. Complaints over irresponsible and unaffordable lending hit 71,685 in the period, with this up from 33,221 a year earlier. The report shows that 34% of complaints were upheld in the consumer’s favour, compared to 37% the year before, while the ombudsman’s caseload increased by more than 50%, year-on-year.
🔓🔓🔓Government urged to scrap the triple lock
The Institute for Fiscal Studies (IFS) has urged ministers to scrap the triple lock on the state pension, suggesting that employers should automatically contribute to private pensions. In a report co-produced with abrdn Financial Fairness Trust, the IFS notes research showing that one in five private sector employees – and 80% of self-employed workers – are not saving in a private pension. The think-tank says mandating that employers contribute to pension schemes worth 3% of workers’ pay would boost private saving by around £11bn a year. While the triple lock means the state pension increases by the highest out of inflation, wage growth or 2.5%, the IFS suggests that officials should peg the pension rate to inflation.
🍷Hospitality sector ‘is being taxed out of existence’
The Government has been warned that the hospitality sector is struggling under the burden of higher taxes. With the rate of employer National Insurance climbing from 13.8% to 15% and the threshold for payment being lowered, Liberal Democrat MP Alistair Carmichael has warned that hospitality “is being taxed out of existence,” while Conservative MP Andrew Griffith suggested that the Government’s approach to hospitality has been “hostile.” Data shows that since the National Insurance changes were announced in October’s Budget, the hospitality sector has cut 69,000 jobs. MPs have called for measures to help support the sector, suggesting that business rates should be reformed and National Insurance should be reduced.
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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.
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- 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.
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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!
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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!
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Check our compensation calculator to see how much your business could be owed!
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections.