Health and Social Care Levy announced

The Government has announced today that a new UK wide 1.25% Health and Social Care Levy will be introduced from April 2022. This will initially be part of national insurance contributions, but will be ring-fenced for health and social care.

From 2023 it will apply as a separate levy, including on those individuals working above state pension age. The UK Government will work with the NI Executive on identifying areas that the new funding should be applied.

At a glance;

• The current 12% rate on earnings between £9,564 and £50,268 will rise to 13.25%
• The current 2% rate on earnings over £50,268 will rise to 3.25%
• Workers above state-pension age will also contribute to the new levy
• Employers national insurance will also increase by 1.25% (currently 13.8%)
• From 2023, the National Insurance increase will appear separately on payslips as a "Health & Social Care levy".

The rate of tax on dividends will also increase by 1.25% (currently: basic rate 7.5%, higher rate 32.5% and additional rate 38.1%).

If you have any questions, please contact a member of our tax team, or send us your query here.