Prime Minister Boris Johnson has announced to the House of Commons that a new health and social care levy is to be introduced across the UK to address the funding crisis in the sector.
1.25% increase in NI from April 2022
The new tax will begin as a 1.25% rise in National Insurance from April 2022 and will be a separate levy on earnings from 2023.
Tax on share dividends will also go up by 1.25%.
The PM told MPS that the new levy will raise almost £36 billion, assuring that this will go straight to the frontline across the whole of the UK.
Although he acknowledged that this breaks a Conservative manifesto commitment not to raise taxes, he countered that ”a global pandemic was on no-one’s manifesto.”
The costs will be shared between individuals and businesses (in other words both Employers and Employees NI will be increased), including those above state pension age.
From 2023 the 1.25% increase will be listed on payslips as a separate Health & Social Care levy.
MPs are due to vote on the plans on Wednesday 8th September.