A new tax year typically brings a number of changes, so the transition provides a good time to evaluate your finances and get a grip on your upcoming budget. This year, like many others, you can expect price hikes in key areas, as the cost of living rises for British families.
While settling their taxes and looking ahead toward the new year, sellers and service providers commonly raise prices, according to the annual rate of inflation. You can’t always side-step higher costs, but a proactive approach at tax time can help you prepare for new household expenses and make necessary spending adjustments. Some recent analysis suggests price hikes could strike in several household areas, potentially resulting in financial distress for some UK families.
Several sources of fast financing can ease the pressure when higher bills interfere with cash flow at home. Working UK families have access to these short-term solutions, when money’s tight. But price hikes are not good news for UK families currently living from paycheck to paycheck, without substantial savings in reserve. A sampling of costs that may climb include the following anticipated spending hikes.
Timely polling suggests more than 95 percent of local authorities are planning to raise the council tax. Of those planning hikes, three-quarters are targeting raises of more than 2.5 per cent. It has been confirmed there won’t be council tax raises exceeding 4.99 per cent. However, you won’t know the precise amount of your personal increase until you receive official notification.
Ofgem, the regulator responsible for energy, placed a cap on tariffs in January, but the limit won’t hold. The regulator has recently announced a raised cap. The January move was thought to lay groundwork for energy customers’ annual savings, but with the newly raised cap, consumers lose out on the potential windfall. In fact, houses are expected to each pay more than £115 in additional energy expenses, with some consumers on the hook for higher bills than they had been paying, before the cap was first established.
Although it represents a relatively small slice of most household budgets, the price of stamps is also on the rise. First Class and Second Class stamps are each slated to raise 3p at the end of March. The new price for a First Class stamp will go up to 70p and the cost of a Second Class stamp will climb to 61p. If you use a lot of stamps it may be worthwhile for you to stock up at the current price, buying enough packs to hold for a while.
Vehicle Excise Duty (VED)
Changes to the car tax may affect some UK motorists more than others. Beginning in April, many owners will pay a standard £5 increase in Vehicle Excise City. However, it will cost some motorists considerably more to stay on the roadways, due to factors affecting VED. First year VED rates will be most noticeably impacted by changes to the tax.
Car tax is calculated based upon a vehicle’s CO2 emissions level and its registration date. The new first year tax could cost as much as £65 more in 2019 than it did last year. The increase will hit hardest in the case of first year tax on high-polluting cars.
The TV licence fee is making a move in April, rising £4 over last year’s price. UK viewers will pay £154.50 for the TV license, unless it is only required for a black and white TV, which runs considerably less, at around £50. You can opt out, choosing not to watch live TV and BBC iPlayer, but you’ll need to make it known by filing a No Licence Needed declaration, indicating your preference.
Tax time provides an opportunity to evaluate spending and project costs for the new tax year. Unfortunately for British consumers, price hikes are on the horizon in many key household spending areas. These are only a few of the increased costs you can expect, beginning in or around April of this year.