The government has announced tax changes to fund £12 billion a year on average to be spent on the NHS and social care across the UK.
National Insurance Contributions (NICs) will increase by 1.25% for one year for employees, employers and the self-employed from April 2022. This will cover Class 1 (employee and employer), Class 1A and 1B and Class 4 (self-employed) NICs.
There will also be an equivalent increase in dividend tax rates from April 2022.
From April 2023, a new ringfenced Health and Social Care Levy of 1.25% will be introduced which will apply to those who pay Class 1 (employee and employer), Class 1A and 1B and Class 4 (self-employed) NICs and will also be extended to those over State Pension Age who are in work.
When the new Levy comes into effect, National Insurance rates will revert back to current levels.
Moneysoft Payroll Manager will be automatically updated to include the changes that will affect payroll from April 2022. This will include the relevant NIC increases and payslip generic messages as necessary. We will publish more detailed information closer to the time.
The GOV.UK page Build Back Better: Our Plan for Health and Social Care. gives more information about the Government’s plan.