The government announces tax changes to fund £12 billion a year to be spent on the NHS and social care across the UK.
National Insurance contributions (NICs) will increase by 1.25% for one year only for employees, employers and the self-employed from April 2022. Those above State Pension Age are not impacted by the April 2022 changes.
From April 2023, a new ringfenced Health and Social Care Levy of 1.25% will be introduced. This will apply to both the employed and self employed. The Levy will also be extended to those over State Pension age who are in work. When the new levy comes into effect, National Insurance rates will revert back to current levels.
The levy will also apply to individuals above State Pension age with employment income or profits from self-employment.
Like National Insurance, levy contributions will apply UK-wide. People will pay the same in England, Scotland, Wales and Northern Ireland.
The government will also increase the rate of income tax on dividend income by 1.25% from April 2022.