Importance Score: 65 / 100 🔴
A prominent accounting firm suggests that President Donald Trump’s ‘Liberation Day’ tariffs are likely to escalate tax burdens in Britain as soon as autumn.
Blick Rothenberg stated that the introduction of 10 percent tariffs on UK exports, commencing next week, will exacerbate the ‘perfect storm’ confronting British enterprises.
On Wednesday, President Trump introduced his ‘reciprocal tariffs’ aimed at addressing a trade imbalance. The United Kingdom is set to face a 10 percent tariff, the lowest tier, while the European Union is bracing for a 20 percent levy.
Simon Gleeson, who leads Blick Rothenberg’s US corporate division, commented, ‘The recent tariff announcement represents another significant headwind, intensifying the already challenging circumstances for UK businesses that manufacture domestically and export to the United States.’
‘Liberation Day represents a further jolt to the UK’s economic prospects, which are already under pressure from alterations to Employers’ National Insurance Contributions, business rates, and the increasing departure of non-domiciled residents,’ Gleeson added.
Tariff implications: Trump’s ‘reciprocal tariffs’ are designed to tackle trade deficits.
UK Businesses Face Mounting Costs
This month marks a period of heightened expenses for businesses as changes announced in the Autumn Budget are now in effect.
Employers will see a rise in National Insurance Contributions from April 6th, with rates increasing from 13.8 percent to 15 percent.
Additionally, the threshold at which employers begin to pay this tax will decrease from £9,100 annually to £5,000.
A survey conducted by the Federation of Small Businesses in late 2024 indicated that 33 percent of smaller employers anticipate workforce reductions. This is an increase from 17 percent in the prior quarter, directly attributable to these fiscal adjustments.
The National Living Wage has also been elevated, climbing from £11.44 to £12.21 per hour for individuals over 21, further augmenting overall payroll expenses.
Small businesses may need to prepare for further financial strain as the tariffs are enacted on April 9th, and as policymakers consider additional tax increases to meet fiscal targets.
Expert Analysis on Fiscal Policy
Gleeson observes, ‘The government took a significant gamble with the Autumn Budget which appears to have backfired. The Spring Statement provided minimal reassurance, perhaps even indicating greater indifference.
‘The developing tariff situation only reinforces expectations for additional tax increases in the upcoming budget.’
The Institute for Fiscal Studies has also suggested that policymakers might need to raise taxes on the working population due to limited fiscal flexibility.
Following the Spring Statement, director Paul Johnson commented, ‘There is a considerable likelihood that economic and fiscal forecasts will worsen between now and the Autumn Budget.
‘Should this occur, further measures will be necessary, likely involving additional tax increases.’