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The Carer Digital
THECARERUK
Issue 68
THECARERUK
PM Sets Out £36bn Tax Increases to “Fix” Social Care
Picture by Pippa Fowles / No 10 Downing Street.
National Insurance contributions will be raised by 1.25% in order to fund Prime Minister (PM) Boris Johnson's plans to “fix” what he says is a "broken social care system". He announced to MPs that he will also include a dividend tax which will increase by 1.25% to fund the reforms with - with this levy designed to target the highest earners who own shares. The Prime Minister had claimed he had a “clear plan prepared” to fix the care crisis in 2019, and six months later won an election promising not to hike
income tax, VAT or National Insurance Contributions (NICs). However, he confirmed NICs will rise 1.25% for both employers and employees in April 2022 in order to raise £12bn a year for both health and care, and this National Insurance rise will eventually be renamed as the Health and Social Care Levy in 2022. Addressing Parliament the PM said: “From next April we will create a new, UK-wide, 1.25 per cent Health and Social Care Levy on earned income, hypothecated in law to health and social care, with
dividends rates increasing by the same amount.” “This will raise almost £36 billion over the next three years, with money from the levy going directly to health and social care across the whole of our United Kingdom.” “This won’t be pay awards for middle management, it will go straight to the front line at a time when we need to get more out of our health and social care system than ever before.”
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