And especially this year. Because the UK economy is going to be battered by a string of tax hikes and price rises from next month.
In her brutal Budget last October, Chancellor Rachel Reeves unveiled a series of tax increases amounting to £40billion. That’s the most substantial hike since 1993.
It provoked a furious backlash from businesses, farmers, entrepreneurs, taxpayers and consumers.
Companies have stopped investing, jobs are being destroyed and shoppers have stopped spending as they worry about the impact.
As a result, economic growth is grinding to a painful halt.
But here’s the thing.
The vast majority of her Budget tax hikes haven’t even hit us yet.
One or two have. Reeves hiked the lower rates of capital gains tax to 18% for basic rate taxpayers and 24% for higher rate taxpayers.
That came into force with immediate effect.
However, the full impact of her tax raids is yet to be felt, as the most significant hikes won’t take effect until April.
Which is now less than four weeks away. This will hurt.
The biggest Budget tax hike of all is the £25billion increase in employer National Insurance (NI) contributions.
From next month, the rate jumps from 13.8% to 15%, kicking in at just £5,000 of wages instead of £9,100. To make matters worse, Reeves is also forcing through a 6.7% minimum wage hike.
Retailers, hospitality venues and care homes will struggle to absorb the triple hit. Some may simply shut down.
Think that won’t hit you? It will.
Struggling businesses have two options if they want to survive. Either hike their prices or cut jobs to offset the added cost of hiring. Or both.
Adding to the pain, business rates also rise in April. HMV is just one of a host of companies scrapping expansion plans as a result.
Reeves isn’t just targeting businesses. Stamp duty thresholds rise in April thanks to her, forcing buyers to scramble to complete before the deadline.
Afterwards, the housing market could stall, hitting everything from builders to furniture stores.
And let’s not forget – income tax and NI thresholds remain frozen until 2028, dragging more people into higher tax brackets every year via fiscal drag.
The freeze, which began in 2022 under the Tories, will hand the Treasury another £45billion – straight from our pockets.
And it won’t stop there.
Beyond Labour’s tax hikes. Council tax is set to rise by up to 5% from April, while gas, water, broadband and mobile bills all jump.
It’s shaping up to be a truly awful April.
The Chancellor’s timing couldn’t be worse either. In the US, President Donald Trump is wreaking havoc of his own.
His tariff threats against Canada, China, Mexico, and the EU have sent global markets into turmoil. UK exporters are frozen in fear, unsure what chaos he’ll unleash next.
The cost-of-living crisis should have eased by now. Instead, inflation is climbing again, even before April’s price hikes hit.
The misery may not end there. Reeves could pile on even more tax hikes in her Spring Statement on March 26. Buckle up.
