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National Insurance Increase to Pay for Health and Social Care

Start up Tax

Prime Minister Boris Johnson announced on 7th September 2021 a new UK wide ‘health and social care levy’ to address the funding crisis in this sector.

The new tax will begin as a 1.25% rise in National Insurance from April 2022:

  • The current 12% rate on earnings between £9,564 and £50,268 will rise to 13.25%.
  • The current 2% rate on earnings over £50,268 will rise to 3.25%.
  • Workers above state-pension age will also contribute to the new levy.
  • Employers will also need to contribute an additional 1.25% (employer national insurance is currently 13.8%).
  • Anyone earning just under £10,000 will still be exempt.
  • From 2023 this will become a separate tax on earned income and the National Insurance increase will appear on payslips as a “Health & Social Care levy”.
  • From April 2022 a typical basic rate taxpayer earning £24,100 will contribute £180 which equates to £3.46 per week.

From April 2022 a typical higher rate taxpayer earning £67,100 will contribute £720 which equates to £13.85 per week.

Tax Increase on Dividend Tax Rates

From April 2022 there will also be an increase in tax of 1.25% on income received from share dividends, which will include company directors in receipt of dividend income from a company shareholding.

A basic rate tax payer is currently paying tax at a rate of 7.5% on dividend income and from April 2022 this will increase to 8.75%. A higher rate tax payer is currently paying tax at a rate of 32.5% and from April 2022 this will increase to 33.75%. An additional rate tax payer is currently paying tax at a rate of 38.1% and from April 2022 this will increase to 39.35%.


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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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