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Health and Social Care Levy

Earnings and benefits 2022/23 2021/22
Earnings, benefits and profits subject to NIC 1.25% N/A

The Health and Social Care Levy (HSCL) was designed to generate an additional funding of £12 billion a year for the NHS and social care across the UK. It has however been repealed as part of the announcements set out within the Growth Plan 2022.

It was intended that for 1 year from April 2022, an increase of 1.25% would applied to National Insurance Contributions (NIC), being added to both employee and employer Class 1 NIC, as well as Class 1A, Class 1B and Class 4 NIC. Following the repeal of the HSCL, Class 1 NIC will revert to the 2021/22 rates with effect from 6 November 2022, with Class 1A, Class 1B and Class 4 NIC for the 2022/23 tax year being pro-rated accordingly.

From April 2023 the 1.25% HSCL was to be applied separately with NIC reverting to the 2021/22 rates, and the NIC thresholds being applied to determine when the HSCL became payable. With the repeal of the HSCL this additional charge will no longer apply.

Also, from April 2022 a 1.25% increase has applied to income tax for those who receive dividend income from shares. The levy will apply for the whole of 2022/23 but following the repeal of the HSCL in 2023/24 dividend tax rates will revert to 2021/22 levels.