Following the economic impact of the coronavirus pandemic, the Government is introducing a new UK wide Health and Social Care Levy. It is expected to raise £12 Billion per year in additional funds for health and social care. This new levy becomes effective from 6th April 2022.
So, how does the affect everyone? Well, from the 6th April 2022 to 5th April 2023 there is an increase in both Employee’s and Employer’s National Insurance Contributions (NIC). This is what the Government are calling the ‘Health and Social Care Levy’. The levy is a 1.25% increase for both parties. Meaning that employees will pay 13.25% Employee’s NIC (currently 12%) on income above £9,880 per annum (£190 per week) and up to £50,270 per annum (£967 per week). Earnings above the £967 weekly threshold will have Employee’s NIC calculated at 3.25% (currently 2%).
Employer’s NIC will be 15.05% (currently 13.8%) on taxable income above £9,100 (£175 per week).
Then from 6th April 2023 onwards, National Insurance rates will return to their current levels and the levy will become a new separate 1.25% tax for employers and a new separate 1.25% tax for employees. This means that unless the Government makes any further changes, the effect on your pay will remain unchanged from the previous tax year.
For further information and reading on this, have a look at the websites below: