Today marks the beginning of a challenging first week of April, with nearly all residents in the country feeling the pinch from numerous price increases and tax hikes that are now in effect.
Both households and businesses are grappling with sharply higher bills and the additional burden of Rachel Reeves’s National Insurance tax raid on companies.
Telegraph Money provides a comprehensive breakdown of the changes in prices and taxes, and offers tips on how to mitigate these financial impacts.
The decision to increase taxes has been criticized by brokers for its negative impact on the housing market, as house prices saw their first drop in nine months this past December.
Prospective homeowners have hurried to finalize purchases before April, though nearly half a million risked not meeting this deadline.
Alex Ogario from Knight Frank estate agency remarked, “There are still considerable savings to be made, or the possibility to borrow more by choosing the right lender. High street banks are fiercely competing for market share, which benefits borrowers.”
The guide also outlines additional strategies to lower your stamp duty costs, such as verifying fixtures and fittings that may be inflating your dues, and exploring first-time buyer schemes for potential deals.
Starting April 6, vacation property owners will face increased expenses as they will no longer be eligible for capital allowances for furnishing or maintenance.
Additionally, tax relief on mortgage interest will be capped at no more than 20%. The standard stamp duty rate for cars registered post-April 2017 will increase by £5 to £195 annually starting today, with specifics depending on the registration date and fuel type of the vehicle.
For the first time, electric vehicles (EVs) are not exempt from Vehicle Excise Duty (VED).
EVs registered from April 2025 will be charged £10 in their first year but will subsequently be subject to the standard rate. EVs registered after 2017 will also follow the standard rate.
Diesel vehicle owners will face a significant increase in fees, with a £5,490 charge for cars emitting over 250g/km of carbon, marking an increase of more than £2,000 from the previous year. Charges may vary if your vehicle was first used before 2017. Only two exemptions are available for road tax.
If you are a recipient of the Personal Independence Payment and the enhanced mobility element, or if you receive the higher rate mobility component of the Disability Living Allowance, you are exempt from this tax. Council tax is another major increase affecting households this month.
Most councils have already issued bills for 2025-26, with about 90% opting to raise rates by the maximum 5% starting April. Additionally, six councils have received special approval for even higher increases.
For example, Labour-controlled Bradford and Newham are allowed increases of 9.99% and 8.99%, respectively, while a proposed 25% increase in Windsor and Maidenhead was denied, allowing only an 8.99% rise.
Residents in Scotland and Wales are also seeing significant hikes, with increases up to 10% and 15% respectively. Amid these rising costs, local governments are cutting back on services like garbage collection, meaning residents are paying more for fewer services.
Individual discounts are available for single residents, households with students, and homes where someone is certified as “severely mentally impaired” by a doctor.
These discounts range from 25% to a full exemption, depending on the household’s composition.
Residents may also challenge their council tax band if it appears higher than similar properties in their area, using tools like the Nationwide house price index to estimate the 1991 value of their home for reassessment.
Business owners are bracing for a series of changes following the Budget, with employer National Insurance contributions set to increase from 13.8% to 15% beginning April 6.
The Office for Budget Responsibility (OBR) predicts that businesses will offset 60% of these higher costs through reduced wages and increased prices, with sectors like care homes and nurseries anticipating significant fee hikes.
