April looks set to be a month of changes for Brits, with hikes to various taxes among the introduction of several other new laws. Here are all the taxation changes being introduced on April 1
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UK households will face several changes in April including the energy price cap, which will result in rising energy costs.
Besides the brand new “no fault” divorce laws and the regular updates to minimum and living wages, monetary incentives like the £150 council tax rebate and household support fund to help with the cost of living crisis will also be introduced in April.
A 5p cut in fuel duty was announced by Rishi Sunak in his 2022 Spring Statement. However, road tax is still set to increase this month alongside other changes to taxation – here’s what you need to know about all the law changes happening on April 1.
Vehicle excise duty (VED) or road tax, vehicle tax or road fund licence, is set to increase from Friday April 1.
Road tax is calculated by using the age of the car and carbon dioxide (CO2) emissions from it.
The standard rate for cars registered after 2017 emitting between 1 and 50kg of CO2 will go up from £155 to £165. Cars that don’t emit CO2 will not need to pay road tax.
Plastic packaging tax
The new plastic packaging tax is an environmental tax designed to encourage businesses to use recycled plastic while manufacturing their packaging, by providing a financial incentive to businesses.
The tax means that starting from April 1, manufacturers and importers will have to pay a tax of £200 per tonne on packaging that is made of less than 30% of recycled plastic.
Corporation tax charge
The rate of corporation tax will be kept at 19% by the Finance Act 2021 for the 2022 financial year. However, this is set to increase to 25% from April 1 2023 onwards, applying to profits over £250,000.
Any companies that earn profits of £50,000 or less will continue to pay 19% as a small profits rate (SPR) from 2023-24.
Meanwhile, companies earning profits between £50,000 and £250,000 will pay tax at the main rate leading to gradual increase in the corporate tax rate.
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New minimum wage and living wage rates will be introduced from April 1.
The recommendations on what the minimum wage and living wage should be for 2022 were made by the Low Pay Commission, which were accepted by the UK government.
From April 1, the National Living Wage – the minimum hourly rate for workers aged 23 and over – will go up by 51p. Meanwhile, the National Minimum Wage, for workers under 23 years old, will increase by 82p.
It will be law for employers to pay their staff no less than these new rates from April 1.
Changes to fuel
Using red diesel and rebated biofuels will be made more widely illegal in the UK starting April 1, as part of the Government’s 2050 climate goals.
The ban is not likely to affect individual consumers as much as businesses, as red diesel is mainly used for off-road purposes like powering bulldozers and cranes for construction or for power drills used in oil extractions.
Covid risk assessments
The government will be removing the legal requirement for employers in England to consider Covid health and safety guidelines as part of their risk assessments from Friday April 1 onwards.