A new health and social care tax will be introduced across the UK to pay for reforms to the care sector and NHS funding in England. It will raise £36bn for front line services over the next three years.
The PM accepted that this broke the pledge the conservatives made in their most recent manifesto but stated that a ‘global pandemic’ was not in any party’s manifesto.
The tax will begin as a 1.25% rise in National Insurance from April 2022 paid by both employers and workers and will then become a separate tax on earned income from 2023 – calculated in the same way as National Insurance and appearing on an employee’s payslip.
Income from share dividends – earned by those who own shares in companies – will also see a 1.25% tax increase.
Proceeds from these rises would lead to £12bn a year going into catching up on the backlog in the NHS created by COVID-19, increasing hospital capacity for nine million more appointments, scans, and operations.
The money will also go towards changes to the social care system, where a cap will be introduced on care costs from October 2023 of £86,000 over a person’s lifetime.
All people with assets worth less than £20,000 will then have their care fully covered by the state, and those who have between £20,000 and £100,000 in assets will see their care costs subsidised.
If you have any queries regarding the above please do not hesitate to contact Amy on amy@hbaccountants.co.uk.
Adapted from: https://www.bbc.co.uk/news/uk-politics-58476632
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