Tax

Following the Prime Minister’s NHS & social care statement this afternoon, the following policy changes have been announced and to be effective from April 2022:

• A 1.25% health and social care levy for all employees and employers; and
• An increase in the dividend tax rate by 1.25%.

The plan for the above is available here – https://www.gov.uk/government/publications/build-back-better-our-plan-for-health-and-social-care – includes summaries for the increase in tax rates extracted for the following:

Health and Social Care Levy Rates

	Employee Main / higher rate	Employer	Self-employed Main / higher rate
Current NIC rates (2021/22)	12% / 2%	13.8%	9% / 2%
2022/23 NIC rates	13.25% / 3.25%	15.05%	10.25% / 3.25%
2023/24 NICs rates	12% / 2%	13.8%	9% / 2%
2023/24 Levy	1.25%	1.25%	1.25%
Charged on all earnings / profits above: (2021/22 thresholds)	£9,568	£8,840	£9,568

Existing NICs reliefs to support employees will apply to the Levy.

The 2021/22 thresholds are used as an illustration: the Levy will apply to earnings/profits above the respective thresholds in future years.

Dividend Tax Rates

	Basic rate	Higher rate	Additional rate
Current dividend tax rates (2021/22)	7.5%	32.5%	38.1%
2022/23 dividend tax rates	8.75%	33.75%	39.35%

The above have only been announced today and may be subject to further consultation or change.

Should you require additional information or to discuss the impact on your business, please contact Charlotte Press or Richard Gray on 028 9040 6300.