What will the Health & Social Care Levy mean for you?
|From April 2022 a UK-wide 1.25% Health and Social Care Levy will be introduced. How will this impact workers and businesses?|
The levy will mean that National Insurance Contributions (NICs) for working age employees, self-employed and employers will increase by 1.25%. The current 12% rate on employees pay on earnings between £9880 and £50270 will rise to 13.25% and the current 2% on earnings over £50270 will rise to 3.25%. Businesses must also make the additional contribution of 1.25%. Employer National Insurance is currently 13.8% and will therefore rise to 15.05%.
The levy will also impact those individuals that receive income by way of dividends in excess of the dividend allowance. The dividend tax rate will increase by 1.25%. How much additional tax you will pay on your dividends will still depend on your Income Tax band. The dividend tax rates will all increase by this 1.25%.
Here’s some examples of how the New Heath & Social Care Levy could affect you:
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