News & Articles

Health and Social Care Levy – April 2022

Tax
Hannah Dumenil
11/03/2022
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Despite recent calls for the upcoming levy to be scrapped, the government has released guidance to implement the Health and Social Care Levy.

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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