Social Care Tax

The Government intends to introduce a new health and social care tax in September 2021 to fund increases in associated spending in England, alongside reforms to the provision and funding of social care. This follows Boris Johnson’s pledge, made upon becoming prime minister in July 2019, to “fix the crisis in social care once and for all”.

From April 2022 there will be a rise in National Insurance Contributions of 1.25% for all working adults, including those over the state pension age, in the UK and matched by employers. The tax rates on shared dividends will raise by the same amount.

From 2023, it will become a separate tax on earned income from 2023, calculated in the same way as National Insurance and appearing on an employee’s payslip as a Health and Social Care Levy.

For administrative reasons, HMRC cannot introduce an entirely new tax (with a new tax base) in time for April 2022. This is why the levy will be preceded by temporary NICs rises.

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