What the government’s new ‘Health and Social Care Levy’ means for the average worker a.k.a YOU

If you would’ve told me back in 2019 that the Tories would break a manifesto pledge I would’ve told you to get out of town! Honestly! If you told me when Boris Johnson took office that he would renege on a promise, I would’ve spat out my Pinot Grigio in disbelief! If you would have told me.… anyway, you get the gist. In another chapter of “Here We Go Again: The UK Edition” the Conservative government has today outlined a new health and social care tax that will be introduced onto our payslips from April 2022.

The health and social care tax is set to raise £12 billion a year and is designed to tackle not only the rising cost of social care but also the backlog of healthcare caused by the global COVID-19 pandemic.

It will begin (keyword there being “begin”) as a 1.25% point rise in National Insurance contributions, and then from April 2023, it will appear as a separate tax on earned income, calculated in the same way as National Insurance contributions, on employees’ payslips.

The increase is also technically a 2.5% rise because employers also pay National Insurance for their employees, and businesses are being subjected to the same 1.25% rise.

So who has to pay? Surely the top earners? Corporations? Billionaires? HA! No no, this tax will be covered by you and me i.e. all working adults, including old workers (can’t forget them after all their years of hard work now can we) and will be “legally ring-fenced” to only go towards health and social care costs. Income from shared dividends – earned by those who own shares in companies – will also see a 1.25% tax rate increase.

So how does this look for the average Joe? If you earn £20,000 a year then you will be looking at an extra £130 tax a year. If you earn £30,000 this goes up to £255. £50,000 will see you paying an extra £505, and if you earn £100,000 a year then good for you, you only lose out on £1,130.

Obviously this move, which is just another in a long list of broken promises, has raised quite a few eyebrows nationwide and got chins a waggin’ (Twitter was made for moments like these). You may also want to get a bowl of popcorn for the next few sessions of Parliament.

But luckily, when later asked in a press conference after today’s announcement if there will be further tax rises, Boris Johnson firmly stated that this is it and there will be absolutely no more. ONLY JOKING - sorry, I just can’t help myself. He did not promise anything of the sort, despite being asked repeatedly to rule it out.

Anyway, stay tuned for the next instalment of “Great Britain: The Wonder Years” which I’m sure is just around the corner.

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Written by Aoibheann Byrne | BrightPay Payroll Software

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Karen Bennett
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