Experts warn UK tax hikes are inevitable in next Budget after tariff bombshell

By ANGHARAD CARRICK

Updated: 12:12 BST, 3 April 2025

President Donald Trump’s ‘Liberation Day’ tariffs are likely to push taxes in Britain even higher in the autumn, according to a leading accountancy firm.

Blick Rothenberg said the imposition of 10 per cent tariffs on UK exports from next week will add to the ‘perfect storm’ facing British businesses.

Yesterday, Trump unveiled his ‘reciprocal tariffs’ to tackle a trade deficit, with the UK facing the lowest possible tariff of 10 per cent, while the EU is facing a 20 per cent levy.

Simon Gleeson, head of Blick Rothenberg’s US corporate desk, said: ‘Last night’s tariff news is a new gust of headwinds adding to the perfect storm for UK businesses manufacturing here and exporting to the US.

‘Liberation Day is a new shockwave for the UK’s economic outlook that continues to be impacted by changes in Employers’ National Insurance Contributions, business rates and the rising exodus of non-doms.’

Tariff bombshell: Trump unveiled huge ‘reciprocal tariffs’ to combat trade deficits 

This month, businesses face even higher costs as changes announced in the Autumn Budget come into effect.

Employers will face higher NIC costs from 6 April, with rates rising from 13.8 per cent to 15 per cent.

The earnings threshold at which employers start paying the tax will also drop from £9,100 a year to £5,000.

A survey by the Federation of Small Businesses at the end of 2024 found that 33 per cent of small employees expect to reduce headcount, up from 17 per cent in the previous quarter, as a direct result of the changes.

The National Living Wage also increased from £11.44 to £12.21 per hour for over-21s adding more to the overall wage bill.

And small businesses might have to brace themselves for more hurt as the tariffs come into force on 9 April and Reeves eyes further tax hikes to meet her fiscal rules.

Gleeson says: ‘Rachel Reeves gambled with a big bet in the Autumn Budget and it has failed, the Spring Statement offered very little reassurance if not more denial and apathy. 

‘The new situation with tariffs only compounds the view that there will be further tax increases in October.’

The Institute for Fiscal Studies also predicted Reeves may have to increase taxes on working people because she has left herself with very little headroom. 

After the Spring Statement, director Paul Johnson said: ‘There’s a good chance that economic and fiscal forecasts will deteriorate significantly between now and an Autumn Budget. 

‘If so, she will need to come back for more which will likely mean raising taxes even further.’ 

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Experts warn UK tax hikes are inevitable in next Budget after tariff bombshell

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