Whether you believe it is a good thing or a bad thing, the Government has finally made a decision on more funding for the NHS with a large proportion ringfenced for social care post-pandemic.
"This will help to raise £12 billion a year!"
All rates of National Insurance Contributions (NIC) and Income Tax on Dividends now increase by 1.25 percent from the 6th of April 2022. It will be decoupled from standard NIC in 2023, which then allows the Government to expand its scope to include taxpayers over the age of the State Pension.
Older workers will pay the Health & Social Care Levy at 1.25% on any income over £9,568 per year. Employees don't usually pay class 1 NIC from State Pension age, although employers do pay secondary class 1 NIC unless there is an exemption such as ex-forces.
The upper earnings limit of £50,570 is now aligned with the Income Tax higher rate, and both of them are frozen until the 6th of April 2026, which was announced at Budget 2021. It is unclear if the primary threshold of £9,568 and the secondary threshold of £8,840 have also been frozen.
Anyone on the minimum wage of £8.91 per hour will pay class 1 NIC when they work for more than 17.4 hours a week, and Income Tax kicks in when they work more than 21.13 hours per week.
I'll keep you updated when I hear more.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about the Health & Social Care Levy, click here to get in touch or give me a call on 01908 774323 and let's see how I can help.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
No unauthorised use, duplication, distribution or modification to any original content contained within this blog is permitted without prior written permission of the author. All other trademarks and registered names are acknowledged.