UK Payroll Workers Fall in April

The number of payrolled employees in the UK dropped by 78,000 in the months leading up to the spring Budget. This marks the largest decline since mid-2020, according to the latest figures from HMRC. The decrease raises concerns about the health of the current UK job market. Businesses are also bracing for the upcoming tax changes announced in the Chancellor’s recent budget. The data, which reflects changes between January and March 2025, shows a dip in employment across several sectors, including hospitality, the construction industry and retail.

What’s Driving the Decline?

Experts point to a combination of economic uncertainty, rising costs and anticipation of tax increases. Many small and medium-sized businesses are already under pressure from energy prices and wage demands. They have been understandably cautious about taking on new employees. The upcoming Corporation Tax adjustments and reduced business reliefs are believed to have added to this hesitation. Employers are tightening their belts, and some are delaying hiring or even letting go of temporary workers due to these difficult rising costs. Covid too has played a major part, as the number of workers on company payrolls has fallen at the fastest pace since the height of the pandemic. An accountant can help keep your business on track with financials. You can contact business accountants Cheltenham and get advice and professional help from people such as https://www.hazlewoods.co.uk/expertise/business-accountants/cheltenham.

The Timing of This Drop Is Notable

This decrease in the number of payroll employees coincides with the weeks leading up to the Budget announcement, which included adjustments to National Insurance thresholds, employer contributions and income tax planning. Although unemployment remains historically low overall in the UK, the dip in workers on payrolls may be an indicator of wider shifts in the labour market. If businesses remain cautious, further reductions could follow. Policymakers will likely monitor the situation closely in the coming months to see how it pans out. For now, the figures serve as a reminder that even small changes in tax policy can have some effects on employment behaviour, especially in a fragile post-pandemic UK economy.