The Health and Social Care Levy comes into effect on 6 April 2022. The only people that will not be affected are those who are above State Pension Age, and are not an employee or self-employed.

For tax year 6 April 2022 to 5 April 2023, Employer Class 1, Employee Class 1, Class 1A, Class 1B and Class 4 National Insurance contributions will increase, for one year, by 1.25%

From 6 April 2023 the National Insurance contribution rates will go back down to 2021 to 2022 levels, and the levy will become a separate new tax of 1.25%.

HMRC will collect the levy through PAYE and for those self-employed via self-assessment.

As an employer if your business pays Class 1, Class 1A or Class 1B National Insurance contributions, you’ll need to start paying the 1.25% increase in contributions from 6 April 2022. You’ll then need to pay the separate 1.25% levy from 6 April 2023.

Existing employer reliefs and allowances, such as employment allowance will also apply to the levy.

HMRC is asking employers, where appropriate, to include the following message on payslips: ‘1.25% uplift in NICs, funds NHS, health & social care’.

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