Business news 14 March 2025
GDP, too sick to work, tribunals, food exports, markets, insolvencies & more business news that we thought would interest our members.
James Salmon, Operations Director.
Please note: on the 19/3/25 CPA are moving offices after 43 years a little down the road to Profile West, 950 Great West Road, Brentford, TW8 9ES
GDP
The UK Economy unexpectedly shrank by 0.1% month-on-month in January, official figures showed on Friday. Britain’s Office for National Statistics said the fall was mainly due to a contraction in the production sector. Economists polled by Reuters had expected the country’s GDP to grow by 0.1%. The UK economy grew by 0.1% in the fourth quarter, beating expectations, ONS data showed last month. It flatlined in the third quarter.
Number of people considered too sick to work rises fivefold
The number of individuals deemed too sick to work has surged to 1.8m, an increase of 383% since the onset of the pandemic. The figures refer to the number of people placed in the “limited capability for work-related activity” category of Universal Credit. Liz Kendall, the Work and Pensions Secretary, is set to introduce reforms aimed at reducing the welfare bill by billions. Ms Kendall said: “Millions of people have been locked out of work by a failing welfare system which abandons people when we know there are at least 200,000 people who want to work and are crying out for the right support and a fair chance.” The rise in claims is attributed to various health conditions, including anxiety and depression.
Backlog in tribunals undermines workers’ rights pledge
Labour’s commitment to enhancing workers’ rights may be undermined by a significant backlog in employment tribunals, which has surged by 31% compared to last year. Caspar Glyn KC, chair of the Employment Lawyers Association, warned that “if justice for workers takes two years or more to achieve, then the rights for hard-pressed working families become illusory.” Nearly half a million cases are currently pending, with delays causing financial strain on businesses. The Government is reportedly recruiting around 1,000 judges and tribunal members to manage the increasing caseload.
UK food exports plummet
The Food and Drink Federation (FDF) reports a significant decline in British food exports to the EU, which have dropped by over a third since Brexit, with volumes falling to 6.37bn kg in 2024, a 34% decrease from 2019. While products like whisky and chocolate remain popular, the FDF attributes the slump to post-Brexit trading arrangements, stating: “These latest figures show the stark reality for the UK’s 12,500 food and drink businesses who are struggling to deal with the complexity and bureaucracy.” In contrast, EU countries have increased their export volumes, and the UK has seen record food and drink imports, valued at £63.1bn in 2024. The FDF urges the Government to collaborate with the industry to eliminate unnecessary trade barriers with the EU.
UK statistics agency delays release of trade data after finding error
The Office for National Statistics has delayed the release of trade data due today after discovering an error dating back to 2023, raising further questions over the quality of its figures.
Stamp duty deadline panic grips buyers
David Byers in the Times speaks to a number of buyers looking to complete property deals ahead of the stamp duty increase next month. Byers says that 116,000 homebuyers are at risk of seeing their property purchase collapse, with conveyancing firms overwhelmed by demand. He adds that the new stamp duty thresholds will significantly impact first-time buyers, particularly in London, where the average increase will be £6,250.
Markets
European stocks closed mostly lower on Thursday, with London unchanged as investors digested US data and monitored developments between Russia and Ukraine. Lingering tariff uncertainty also weighed on sentiment.
Overnight in the US the S&P 500 fell again, down 1.39% to 5521.52 and the NASDAQ dropped 1.96% to 17303.01. The S&P 500 stock index officially entered correction territory, joining the NASDAQ, falling by 10% from its record high in February. It slipped further on Thursday, after Donald Trump threatened a 200% tariff on alcohol from EU countries. Markets have been spooked by Mr Trump’s erratic protectionism and the prospect of slowing economic growth.
Barclays cut its US growth forecast to 0.7% for 2024 from 1.5%, citing higher tariffs and policy uncertainty, while raising its inflation outlook to 3.6% from 3.3%.
US and European equity-index futures rallied with Asian stocks Friday as signs the US will avoid a government shutdown boosted sentiment.
US President Donald Trump said Thursday he plans to put a 200% tariff on alcohol from France and other European nations in the latest escalation of global trade tensions. The US tariff comes after the European Union moved to reinstate an import tax on American whiskey.
This morning on currencies, the pound is currently worth $1.292 and €1.191. On Commodities, Oil (Brent) is at $70.6 & Gold is at $2996. On the stock markets, the FTSE 100 is currently up 0.43% at 8580 and the Eurostoxx 50 is up 0.70% at 5366.
Huawei
Prosecutors in Belgium made multiple arrests in its corruption case linking Huawei, a Chinese tech firm, and the European Parliament. Lobbyists from Huawei are accused of bribing European MPs in exchange for favourable policies. Both the firm and the European Parliament said they would assist authorities with the investigation.
Stamp duty deadline panic grips buyers
David Byers in the Times speaks to a number of buyers looking to complete property deals ahead of the stamp duty increase next month. Byers says that 116,000 homebuyers are at risk of seeing their property purchase collapse, with conveyancing firms overwhelmed by demand. He adds that the new stamp duty thresholds will significantly impact first-time buyers, particularly in London, where the average increase will be £6,250.
More retirees pay income tax than Gen Z
Recent HMRC data reveals a significant shift in income tax contributions, with 5.45m Britons over 70 paying more tax than 5.23m under 30s in the 2022-23 financial year. This change is attributed to the triple lock policy, which has increased pension payments, and a rise in youth worklessness, leaving nearly 1m young people not engaged in employment, education, or training. The report highlights that over 70s contributed £19.1bn in income tax, surpassing the £18.3bn from those under 30. The Institute for Fiscal Studies noted that two-thirds of pensioners now pay income tax, compared to 64.4% of working-age individuals. Commenting on the figures, Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “Pensioners were paying a significant chunk of tax. ” However, she warned: “Frozen tax thresholds, coupled with increased state pensions, may pull more pensioners who are solely reliant on state pension into taxpaying territory.”
Panic over tax raid triggers six-week pension delays
Unused pension pots will be subject to a 40% inheritance tax from April 2027, the Express reports, prompting many savers to withdraw large sums ahead of schedule. Clients are now facing significant delays in receiving their cash as financial firms are inundated with withdrawal requests. Daniel Hough from RBC Brewin Dolphin said: “It used to take two weeks to withdraw pension money – now it’s taking six, sometimes even longer.” The changes are expected to push 10,500 families into paying inheritance tax. Under the new rules, an additional rate taxpayer in England with a £350,000 pension could see almost 90% of it swallowed up by tax after IHT and income tax deductions. Major firms like Hargreaves Lansdown and AJ Bell are urging a reconsideration of the policy.
Landmark ruling in home loan case
A landmark ruling has allowed a family to avoid a hefty inheritance tax bill after a legal dispute with HMRC. Leslie Elborne sold her home to a trust in 2003 in exchange for a loan note, which she subsequently gave to a second trust to lower her family’s inheritance tax bill. Ms Elborne died in 2011, more than seven years after initiating the scheme. Her executors successfully argued that the property transfer was a gift, exempting it from inheritance tax. Paul Davies from Clarke Willmott, who was involved in establishing the scheme, said he was relieved at the decision. “It’s difficult for an individual taxpayer to take on the huge resources of the state and win,” he said. Moore Kingston Smith’s John Hood, a former tax inspector, commented: “I’ve heard of people using this planning with very modest properties worth £400,000 or £500,000. So it can affect a huge range of people.” An HMRC spokesman said: “Home loan schemes are clearly an aggressive form of tax avoidance. We’re disappointed by the tribunal’s decision and are considering an appeal.”
Dettori files for bankruptcy amid tax dispute
Classic winning jockey Frankie Dettori has filed for bankruptcy due to unresolved tax disputes with HMRC. The issues stem from a tax avoidance scheme he participated in, which was later deemed invalid. Dettori expressed sadness and embarrassment over the situation, advising others to manage their finances carefully.
Latest Insolvencies
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.
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Under your annual subscription you will have access to our main services:
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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!
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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!