Business news 10 April 2025
Tariffs above 10% base paused. One in five firms add to workforce in Q1. Firms overpay CT. Mortgage rates, EU, Steel, 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.
Tariffs above 10% base paused
US President Donald Trump abruptly paused new tariffs on most countries Wednesday after admitting they made the markets nervous, but he doubled down on a trade war with rival China. Following days of market turmoil, Wall Street stocks surged in reaction to Trump’s announcement on his Truth Social network that he was halting tariff hikes for almost all nations for 90 days. Trump had imposed a 10% baseline tariff on all countries which came into effect on Saturday, as well as higher rates on key trading partners like China and the EU, which activated on Wednesday. But on Wednesday, Trump paused the higher tariffs, while the baseline would remain. Wiping out the UK’s relative advantage that it had enjoyed.
The about face came just 13 hours after the tariffs came into effect and following a panic on the US treasuries market as Treasuries lost their safe haven status, all be it briefly. The markets and Trump played a game of chicken and Trump blinked first.
One in five firms add to workforce in Q1
UK employers scaled back hiring in Q1, with British Chambers of Commerce (BCC) analysis showing that just 20% of firms increased their workforce in the first quarter. This is the lowest level since the first three months of 2021. The poll of more than 5,000 businesses also found that 17% reduced headcount in Q1. Jane Gratton, the BCC’s deputy director of public policy, said: “Firms are struggling under the weight of skills shortages, recruitment difficulties and spiralling employment costs.” This comes with the rate of employer National Insurance contributions climbing from 13.8% to 15% and the earnings threshold being reduced from £9,100 to £5,000. Firms are also contending with a rise in the minimum wage. Business leaders are also concerned that the Government’s proposed Employment Rights Bill will make it harder to recruit and retain staff.
Firms overpay £14.2bn in corporation tax
UK firms overpaid more than £14bn in corporation tax in the last tax year, according to analysis by UHY Hacker Young. Data shows that British businesses overpaid £14.2bn in corporation tax to HMRC in the year to April, with around 400,000 companies handing over too much. The report suggest that HMRC leads firms to higher than necessary corporation tax, with businesses facing financial penalties if profit comes in lower than had been expected. UHY Hacker Young said the system can cause “significant cash flow problems,” noting that companies have to reclaim excess payments themselves. An HMRC spokesperson said the claims are “nonsense and disappointing to see,” with companies responsible for assessing their own tax liability.
Mortgage lenders cut rates
With analysts expecting the fallout of new US import tariffs to deliver deeper than previously predicted interest rate cuts, UK lenders have started cutting mortgage rates. Coventry Building Society has reduced its two-year fixed rate mortgage to below 4%, while Co-operative Bank, Clydesdale Bank, and Newcastle Building Society have also cut rates. They join TSB, Metro and Bank of Ireland, who had already cut rates. Moneyfacts analysis shows that the average two-year fixed mortgage rate ticked down to 5.3%, while the average five-year fix edged lower to 5.15%. Brokers believe more cuts are likely, with other lenders set to follow if Halifax, Nationwide, HSBC, Santander, Lloyds, and NatWest opt to reduce rates.
Ministers look to secure British Steel future
Culture Secretary Lisa Nandy says an agreement over the future of British Steel is “achievable and within sight.” This comes with the Government considering nationalising the business, which is owned by Jingye. The Chinese firm says it has invested more than £1.2bn to maintain operations at British Steel and claims to have suffered financial losses of around £700,000 a day. Ms Nandy said she is “absolutely confident” that ministers “are doing every single thing that we can to secure the future of British Steel.”
Reeves: It is ‘imperative’ to improve UK-EU trading relations
Rachel Reeves says it is “imperative” for the UK to improve its trading relationship with the EU. This comes as new US import tariffs have prompted concern over a global trade war. The Chancellor said that while it has been harder for British firms to export around Europe since Brexit, with many feeling “shut out” of European markets, “I feel that in the current environment, there is a greater willingness from countries around the world to look at both tariff and non-tariff barriers that are holding back trade.” Ms Reeves said the UK-EU summit in May will be a chance “to refresh our relationship and make it easier for businesses to trade.”
Markets
The European Union voted to approve its first set of retaliatory measures to counter tariffs imposed by the US on steel and aluminium. The European Commission, the bloc’s executive arm, said duties would start being collected on a first tranche of tariffs on US imports from April 15, with a second set of measures following on May 15. According to a draft document seen by CNBC in March, the tariffs target a wide range of goods, including poultry, grains, clothing and metals. The EU has not released a final list of impacted products, and declined to comment further on Wednesday.
Yesterday, the FTSE 100 closed down 2.92% at 7679.48 and the Euro Stoxx 50 closed down 3.17% at 4622.14.
But then WOW! Trump whipsawed back delaying all “reciprocal” tariffs for 90 days. Except those on China, which he raised to 125%.
Overnight in the US the S&P 500 rose a massive 9.52% to 5456.90 and the NASDAQ rose an even bigger 12.16% to 17124.97.
This morning on currencies, the pound is currently worth $1.2875 and €1.166. On Commodities, Oil (Brent) is at $63.8 & Gold is at $3108. On the stock markets, the FTSE 100 is currently up 3.9% at 7978. and the Eurostoxx 50 is up 5.25% at 4865.
Housing
The UK Housing Market became subdued towards the end of March, following an initial rush to beat the stamp duty deadline at the end of last month, according to surveyors. The Royal Institution of Chartered Surveyors said its feedback from professionals points to house prices flattening out in recent months.
UK gilt yields hit 30-year highs
The interest paid on long-term government debt has hit the highest level since July 1998. The yield on 30-year gilts – the interest paid on UK government debt – has risen amid uncertainty caused by US tariffs on imports. Michael Metcalfe, head of macro strategy at State Street Global Markets, warned: “If yields go up and stay up this causes problems for the UK fiscal position and could put pressure on sterling as well.” The increase has largely been caused by a spike in US Treasury yields, which have soared as banks sell off bonds to raise cash for clients withdrawing their money.
Tariffs could destabilise financial system – BoE
The Bank of England has warned that a trade war stemming from President Donald Trump’s tariffs for imports into the US could destabilise the UK’s financial system and depress growth. The Bank’s Financial Policy Committee said: “As the UK is an open economy with a large financial sector, global risks are particularly relevant to UK financial stability.” Officials noted, however, that the UK banking system has “the capacity to support households and businesses, even if economic and financial conditions were to be substantially worse than expected,” highlighting that banks have “high levels of liquidity.”
City cuts growth forecasts
Analysis by Consensus Economics shows that City analysts have cut UK growth forecasts due to uncertainty caused by new US tariffs. The report shows that forecasters expect the economy to grow by 0.8% this year, with this around two thirds the rate of previous estimates. Before President Donald Trump announced the new charge on imports into the US, the Bank of England said it expected the UK economy to grow 0.75% in 2025, while the Office for Budget Responsibility predicted growth of 1%.
Streaming giants face tax call
MPs have called for streaming giants like Netflix, Disney, Amazon and Apple to pay a “Netflix tax” of 5% on their UK revenues to fund high-quality British TV shows. The Culture, Media and Sport Committee said: “Streamers laud the UK’s mixed production ecology… but their business practices are putting that at risk.” The MPs propose a voluntary cultural fund, with government intervention if necessary.
Treasury could land pension pot tax windfall
As of April 2027, unspent defined contribution pensions will be included in estates for IHT, potentially pushing many families over the £325,000 threshold and incurring a 40% tax bill. While the Treasury anticipates this will generate £1.46bn annually by 2029, former Pensions Minister Steve Webb believes the Government has underestimated the revenue. He also notes that every pension withdrawal triggers income tax and often VAT, leading to a potential windfall for the Treasury. Mr Webb says that although the impact of IHT reforms on farmers have “grabbed most of the media attention, it is the IHT changes relating to pensions which will affect far more people and raise far more money.”
Saver hits ISA limit in 11 minues
With the new tax year having started this week, one Bestinvest client utilised their full £20,000 ISA allowance almost immediately, completing their investment by 12:11am on April 6. With personal tax allowances frozen until 2028, ISAs have gained popularity among savers seeking to protect their funds from taxation. Alice Haine, personal finance analyst at Bestinvest, said: “Making use of ISAs to shelter savings and investment from taxation is vital now that the UK tax burden is estimated to be at the highest level since the Second World War.”
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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!