People are bracing themselves for a string of increased costs. Almost every individual and business in the UK can expect to be impacted by at least one rise.
Starting from today, bills across the UK are set to go up as new price hikes come into effect from the start of April. However, this is just the beginning, as Labour’s new tax increases will take effect by the end of the week.
The comprehensive list of changes set to impact budgets this month includes:
- Road tax
- Council tax
- TV licences
- Mobile and broadband bills
- Water bills
- Energy bills
- Stamp duty
- Jobs tax
- Non-dom tax status
Road tax
For cars registered after April 2017, road tax will increase by at least £5 from April 1, although the exact amount you’ll end up paying depends on your specific car. According to the Telegraph, drivers with the largest diesel engines could see the most significant jump, with a staggering £2,000 increase for road tax.
Electric vehicles will no longer be exempt from Vehicle Excise Duty and will be billed at the standard rate if it was registered after 2017 and before the end of this month. EVs registered after April 2025 will pay £10 for their first year and move to the standard rate in the next tax year.
Council tax
Individual councils have the power to decide how much to increase their council tax each year, up to a maximum of 5%. However, this year, Angela Rayner has granted exceptions to six councils, allowing them to increase their council tax by up to 9.99% in England.
In Scotland, council tax is set to rise by up to 10% from today in some areas. Certain regions in Wales could also see a surge of up to 15%.
TV licences
The TV licence fee was frozen at £159 between 2022 and 2024, however, last April saw the first increase in line with inflation, taking it to £169.50.
From April 1, the fee will climb by £5, making the annual cost for a colour TV £174.50. The price for black and white TV licences is also on the rise, moving from £57 to £58.50.
Mobile and broadband bills
These bills are set to rise by 7.5% this month, potentially pushing the average household bill up by £106. This comes after Ofcom implemented a series of rule changes requiring providers to inform customers about increases in pounds and pence rather than using inflation-linked increases, providing more clarity for customers.
Water bills
From today, the average household in England and Wales could see their water bill rise by approximately £123 per year. The increase will vary between suppliers, with some of the most significant hikes, such as Southern Water’s 47% rise, causing household bills to leap by over £700 annually.
Energy bills
As of April 1, the energy price cap is also set to rise by 6.4%, pushing the typical gas and electricity bill from £1,738 per year to £1,849. This will only impact households on variable tariffs and should not affect the cost for those on a fixed energy deal.
Stamp Duty
The tax-free stamp duty threshold is set to decrease today from £425,000 to £300,000. This means that those looking to purchase their first property are more likely to face this charge.
The situation for home-movers will also change as the threshold on other properties is being reduced from £250,000 to £125,000.
Moreover, starting from April 6, owners of holiday homes will no longer be able to claim capital allowances for furnishings or maintenance work. This could potentially increase their bills, especially with the tax relief on mortgage interest also being limited to a maximum of 20%.
Jobs Tax
One of the most contentious changes announced in Rachel Reeves’ October Budget is the rise in employer National Insurance, which will increase from 13.8% to 15% from the start of the new tax year on April 6. While this will raise costs for employers, the Office for Budget Responsibility anticipates that companies will pass on approximately 60% of this cost to their customers.
Another measure introduced for the hospitality and leisure industry during the pandemic, which offered up to 75% discounts on business rates bills, will soon be reduced to 40%.
Non-dom tax status
From April 6, UK citizens residing permanently overseas and newcomers to the UK will encounter different tax systems as the ‘domicile status’ is abolished. It will be substituted with “a new internationally competitive residence-based regime”.
This change will impact UK citizens living abroad who earn income from the UK, as well as international citizens residing in the UK and earning money from overseas.
