National Insurance to increase through a health and social care levy
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Prime Minister has announced a new tax in the form of a Health and Social Care Levy.
From 1st April 2022, employer NICs will increase by 1.25 percentage points. Employee NICs will also increase by 1.25 percentage points, including for workers above state pension age.
It was also announced that self-employed Class 4 NICs will also increase - paid on annual profits beyond £9,569 and company dividend payments will rise from 7.5% to 8.75%.
The tax rise will raise £12bn, ringfenced to fund investment in health and social care. The investment will be spent on the following:
- Tackling NHS Covid backlogs and cut waiting times with new £36 billion investment for health and social care
- Responsible, fair, and necessary action taken to provide biggest catch-up programme in the history of the NHS and reform the adult social care system
- NHS capacity to increase to 110% of planned activity levels by 2023/24, offering more appointments, treatments, and operations
- Social care reform plan will end catastrophic costs for people across the country, and include extra investment in care sector to improve training and support
- Funded by a new Health and Social Care Levy on working adults and an equivalent rise in the rates of dividend tax to make sure everyone pays their fair share