The Prime Minister has today announced a new UK wide “Health and Social Care Levy” to come into effect from April 2022. The aim of the new levy is to fund social care across the UK.
Initially this will mean that with effect from April 2022, National Insurance Contributions (employee, employer and self-employed) will increase by 1.25% and tax on Dividends will also increase by 1.25%.
With effect from April 2023, this new levy will be shown as a separate tax on earned income. At this point working adults above state pension age will also start contributing.
The changes announced to the operation of social care in England will not apply to N. Ireland, Scotland and Wales as they have their own social care arrangements. The devolved governments will therefore collectively be allocated an extra £2.2bn each year on average in health and social care spending as a result of the levy.
The Chancellor has also today advised that an Autumn Budget will be announced on 27th October 2021 alongside the outcome of a Government spending review.
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