UK businesses are preparing for a significant increase in costs as new wage and tax measures take effect this week. Starting from tomorrow, the national minimum wage will rise to £12.21 per hour, benefiting millions of workers. However, this wage increase coincides with unexpected tax changes, including a reduction in business rates discounts for over 250,000 firms, which will see average rates soar from £3,589 to £8,613. Alex Probyn, practice leader of property tax at Ryan, says these rises “will disproportionately affect small and independent businesses across sectors already struggling.” Additionally, a new plastic packaging tax will impose further costs on retailers and leading to higher consumer prices. From Sunday, changes to national insurance contributions will add to the financial strain on businesses, with the employer NIC rate increasing from 13.8% to 15%.

Neil Carberry, CEO of the Recruitment and Employment Confederation (REC), has called on Rachel Reeves to implement business-friendly policies to invigorate the jobs market, stating: “Too often, the Government talks a good game but day-to-day action paints business as the problem rather than the solution.” A recent survey of over 700 UK employers revealed persistent pessimism regarding hiring, particularly among small businesses. The REC’s earlier survey indicated that increased national insurance contributions have negatively impacted hiring intentions. Carberry stressed the need for the Chancellor to revise the Employment Rights Bill and foster genuine partnerships with businesses, asserting: “British business wants this Government to succeed – but they need to support us to help them do it.”

The Office for Budget Responsibility (OBR) has warned that company profits in the UK are expected to fall to their lowest level since the financial crisis, attributing the decline to “persistent earnings growth squeezing profits.” The OBR has halved the growth forecast for this year to just 1%, citing rising costs from increased National Insurance Contributions, a higher national minimum wage, and reduced business rates relief. The forecast for corporation tax receipts has also been cut, with an expected £5.5bn less than previously estimated. The OBR predicts that profits as a share of GDP will drop from 15.1% in 2024 to 14.3% this year, a level not seen since 2010.

Lord Moynihan has sharply criticised Labour’s economic policies, claiming they are “catastrophic for growth” and that Britain is “flirting with recession.” Following the Spring Statement by Rachel Reeves, he accused the Chancellor of milking businesses through increased taxes while dishing out “inflation-busting pay rises” to Labour’s public sector allies. The businessman and venture capitalist went on to slam the new Employment Rights Bill, calling it “catastrophic for business” and criticised “moral panics” around net zero and diversity initiatives, arguing they’ve resulted in “a huge spray of regulation” with little purpose. The Tory peer argues for a return to free markets and sound money to foster innovation and prosperity.

British business confidence remained stable at 49% in March, matching February’s six-month high, according to the Lloyds Bank Business Barometer. Retailers showed particularly strong confidence, aligning with recent data indicating a surprising rise in retail sales volumes in February. Hann-Ju Ho, senior economist at Lloyds Commercial Banking, said: “Business confidence remained steady this month, suggesting that UK companies may have been waiting to see the impact of government decisions at home and globally.” Despite this positive trend, concerns linger over potential tax hikes and rising energy bills that could hinder sustained recovery.

Charlotte Gifford reports in the Sunday Telegraph that HMRC recently confirmed that around 900,000 extra landlords and freelancers earning over £20,000 will be swept into the Making Tax Digital initiative from April 2028. It had already been confirmed that those with property or self-employment income over £50,000 would join from April 2026, while those earning £30,000 or more would join from April 2027. An HMRC spokesman said: “Making Tax Digital is designed to reduce time spent on record-keeping and tax administration, giving self-employed taxpayers more time to grow their business.” But experts say MTD leads to increased costs and a higher chance of error. Robyn Milstead, of LKA Chartered Accountants, said: “It’s obvious that the more often you submit, the higher the chance of creating errors. Because the chance to get it wrong has gone up from once a year to five times a year.”

The Office for Budget Responsibility (OBR) has slashed its forecast for income from capital gains tax (CGT). After former Tory Chancellor Jeremy Hunt cut the annual CGT-free allowance from £12,300 to just £3,000, Rachel Reeves hiked CGT on non-property assets to 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. Charlene Young, senior pensions and savings expert at AJ Bell, explains: “Just five months after the Budget, the OBR has wiped £23bn off the projected CGT take by 2030.” Upcoming reductions to business asset disposal relief – which rises form 10% to 14% from April, and to 18% in 2026 – has also prompted an asset sell-off resulting in fewer tax receipts long term and less economic growth. Harvey Jones in the Express says the overall tax take will slump due to Labour’s policies as those who should be driving the economy have fewer incentives to work hard.

Fears are escalating that Rachel Reeves may target pensions in the upcoming Autumn Budget to address a fiscal shortfall. Advisory firm Oxford Economics has indicated that £5bn of the £9.9bn buffer Reeves had to meet her fiscal rules has already diminished due to rising bond yields. Paul Johnson, director of the Institute for Fiscal Studies (IFS), said: “That risks months of speculation over what those tax rises might be,” pointing to a potential raid on pensions as a possibility. Former pensions ministers, including Sir Steve Webb and Baroness Altmann, have urged the Chancellor to rule out major changes to pension tax relief, warning that it could deter retirement savings and harm individuals’ financial security in old age.

Prosecutions of tax evasion enablers have drastically decreased, with fewer than five cases reported in 2023-2024, a significant drop from 16 in 2018-2019. This is according to figures obtained by the Bureau of Investigative Journalism, but Labour peer Prem Sikka says tax authorities are refusing to provide exact figures, citing confidentiality. “Parliament can’t properly question HMRC because it hides behind a veil of confidentiality [while] ministers just shrug their shoulders and carry on,” Lord Sikka adds. “The thriving industry of people enabling tax evasion will continue until there are visible prosecutions,” said Dan Neidle, founder of the independent thinktank Tax Policy Associates. “A handful of prosecutions won’t change anything,” he added. “Prosecutions are expensive undertakings, but public confidence in the tax system requires them.”

The Home Secretary has committed to ending “jobs on tap” for illegal immigrants by closing loopholes in the UK’s border laws. Yvette Cooper aims to “restore order to the asylum system” by targeting businesses like takeaway services and beauty salons that hire undocumented workers. Cooper said: “We are introducing tough laws and stopping rogue employers in their tracks,” with potential penalties including unlimited fines and prison sentences for non-compliant employers. The new regulations will amend the Border Security, Asylum and Immigration Bill, ensuring that gig economy firms conduct right-to-work checks similar to traditional employers. This initiative follows a report estimating the illegal immigrant population in the UK to be between 800,000 and 1.2m.

UK job vacancies experienced a 3.7% month-on-month increase in February, marking the fastest growth in three years, according to data from Adzuna. The rise was primarily driven by the graduate and healthcare sectors and followed months of slow or no growth in postings. Although vacancies were down 0.8% compared to February 2024, this annual decline was the smallest since July 2022. It is also noted that advertised salaries have consistently outpaced inflation for the past ten months, with a 7% annual increase in February.

The National Crime Agency has been investigating barber shops across the UK suspected of being used as a front to launder the proceeds of crime. The number of Turkish-style barber shops has increased by more than 50% since 2018 to 18,411 with many taking cash only. Investigations reveal many declare large takings but are empty most of the time. The NCA, along with HMRC and the Home Office’s immigration enforcement department, has raided dozens of premises over the last month, leading to the arrest of individuals linked to drugs and people smuggling. The Times points out that barbers do not have to register as a business with Companies House as they can operate as a sole trader instead, making it more difficult to track money flows.

Investors are increasingly concerned about the implications of the UK’s tax regime for the growth of crypto in the country. HMRC considers digital assets as taxable property, meaning profits from trading, staking or selling crypto are subject to CGT or income tax. The CGT allowance has been cut from £12,300 in 2022 to just 3,000 and now a 24% CGT rate looms. “Unlike the US, where the President Trump has embraced crypto-friendly policies, the UK remains deeply sceptical”, said David Morrison, senior market analyst at Trade Nation. “Rather than fostering innovation, the Government is taking a paternalistic approach, treating investors as if they can’t manage their own risks. This could drive crypto firms and developers to more favourable jurisdictions.”

This week, the UK’s Supreme Court will hear a pivotal case regarding potential compensation for millions of motorists affected by unlawful hidden commission payments in the car finance sector. Following a Court of Appeal ruling that deemed such payments illegal without buyer consent, lenders, including major banks, have set aside substantial funds for claims that could reach hundreds of pounds per individual. The Financial Conduct Authority (FCA) has received numerous complaints, and while the Supreme Court’s decision is awaited, the FCA is considering a compensation scheme for affected drivers. Alex Neill from Consumer Voice warned that if the Court agrees with the previous ruling, compensation could reach tens of billions of pounds, comparable to the Payment Protection Insurance (PPI) scandal.

Sir Keir Starmer has said the UK reserves the right to respond to the 25% import tax on cars imposed by US President Donald Trump, set to take effect on April 2nd. The OBR has warned that a full-blown tariff war could reduce the UK’s GDP by 1% next year, jeopardising Chancellor Rachel Reeves’ fiscal plans. But the FT reports that the Prime Minister is in fact taking a “cool-headed” approach to Trump’s escalating trade offensive with Lord Peter Mandelson working on a draft “term sheet” for a US-UK trade deal. Further tariffs are promised for next week as Trump looks to force countries to scrap taxes on US companies and reduce regulatory burdens. For the UK, this will mean addressing the Digital Services Tax, which raises about £800m a year, while the EU is reportedly drawing up concessions. The Telegraph reports that the European Commission is said to be looking at areas for negotiation including lowering its own duties, mutual investments with the US, alongside the potential loosening of some regulations and standards.

As the prospect of tariffs from the Trump administration on UK trade becomes increasingly likely, the International Chambers of Commerce (ICC) is advocating for a comprehensive trade plan that could potentially unlock £250bn in economic growth. David Maddox in the Independent reports that the ICC’s Plan for Growth aims to modernise outdated paper-based systems, which they argue are hindering productivity and economic expansion. Chris Southworth, secretary general of the ICC United Kingdom, says: “Outdated bureaucracy is holding back the UK’s economic potential. With this plan, we can modernise trade, unlock growth, and strengthen our position as a global leader in digital trade.” The ICC has partnered with HMRC to create the International Centre for Digital Trade and Innovation (iC4DTI) – the only centre of its kind globally, aligning public and private sector efforts to digitalise trade.

The UK economy experienced modest growth of 0.1% in the final quarter of 2024, according to the Office for National Statistics (ONS). The figure remains unchanged from earlier estimates, reflecting a sluggish economic performance throughout the latter half of the year. Additionally, the ONS reported a 0.1% decline in GDP for January, attributed to weak manufacturing and construction sectors, exacerbated by poor weather conditions. However, real households’ disposable income (RHDI) per person rose by 1.7% in the fourth quarter, indicating increased spending power for consumers.

Forvis Mazars is launching a training programme aimed at improving the telephone communication skills of its Gen Z employees, who are reportedly anxious about phone conversations. UK chief executive James Gilbey said: “We’ve committed to a major firm-wide investment to put relationship skills front and centre.” The initiative responds to concerns that remote work and digital communication have left many young hires unprepared for essential workplace interactions.