The UK government has announced an extra tax to fund health and social care and to help the NHS recover from the COVID-19 Pandemic.
Employees, employers, and the self-employed will all pay 1.25p more in the pound for National Insurance (NI) from April 2022.
NI will revert to the usual rate from April 2023 and the extra tax will be collected as a Health and Social Care Levy.
Boris Johnson also plans to raise taxes on company dividend payments.
As with the NI increase, taxes on dividends will rise by 1.25% in order to fund health and social care. Under the Prime Minister’s plans, investors can earn up to £2,000 in dividends before they are liable to be taxed.
However, the dividend tax rate of 7.5% paid by basic rate taxpayers in the current financial year will increase to 8.75% from 2022-23 onwards. The levy for higher rate taxpayers will rise to 33.75%, while additional rate taxpayers — those earning more than £150,000 a year in England — will see an increase of 39.35%.
As always, if you would like any further information regarding the tax increases, please speak with your usual Williamson & Croft contact. Otherwise, feel free to contact our offices on 0161 399 0121 / 0151 303 3112 or by email info@williamsoncroft.co.uk.