A new health and social care tax is being introduced to help the NHS recover from the Covid pandemic and improve social care in England.
Boris Johnson has confirmed his government will impose a £12bn-a-year package of tax increases from next April to tackle NHS Covid backlogs and overhaul social care.
What are the tax increases?
The tax will begin as a 1.25% increase to National Insurance Contributions (NICs) from April 2022, paid by both employees and employers, and will then become a separate tax on earned income from 2023 - calculated in the same way as NICs
This will be paid by all working adults (including pensioners who work), and the government says it will be "legally ring-fenced" to only go towards health and social care costs.
Dividend income from shares - will also see a 1.25% tax rate increase.
What else was announced?
A cap will be introduced on care costs from October 2023 of £86,000 over a person's lifetime.
All people with assets worth less than £20,000 will then have their care fully covered by the state, and those who have between £20,000 and £100,000 in assets will see their care costs subsidised.
Contact Us
Please contact us to find out how the above applies in your circumstances and how you can reduce your tax liabilities and maximise your tax efficiency.
Please note that the above is for general information only and does not constitute financial or tax advice. You should not rely on this information to make or refrain from making any decisions. You should always obtain independent professional advice in respect of your own situation.
