A new 1.25% Health and Social Care Levy is being introduced to help the NHS recover from the Covid pandemic and improve social care in England from April 2022. From 2022, this levy will take the form of a 1.25% increase in national insurance contributions, which will be levied on employers and employees. From April 2023, national insurance will return to its current rate, however the new levy, which will appear on wage slips as a "Health and Social Care Levy", will then become a separate levy on income. This levy, unlike National Insurance, will also be paid by pensioners who work. Somebody on £20,000 a year will pay an extra £130, while someone on £50,000 will pay £505 more. Undoubtedly, this will affect employers as they will need to consider the impact on overall costs as well as the effect on employees who will likely view their salaries differently. As payroll is set to become even more complex, please feel free to contact our expert team at compliance@sbcontracting.co.uk with any questions on this matter.
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