Health and Social Care Levy (Repeal) Bill 2022-23 was passed through all stages in the House of Commons on 11th October and received the Royal Assent after a fortnight. It was on November 6th the Bill was agreed unamended. The Health and Social Care Levy (Repeal) Bill 2022-23 determines to repeal the Health and Social Care Levy Act 2021 that was introduced under the Prime Ministership of UK PM Boris Johnson in September 2021.
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Besides the amendment proposal, the Treasury has maintained “funding for health and social services will be maintained at the same level as if the Levy was in place.” It added that the increase in tax rates on the dividend income which were imposed from April 2022 would be reversed from April 2023.
Shortly after Liz Truss took over as Johnson’s successor, at the Prime Minister’s Questions on September 7th, announced the ‘reapelment’ of the NIC. The then Chancellor Kwasi Kwarteng confirmed that the 1.25 percentage point rise in NICs rates for employees, employers and the self-employed would be reversed from 6 November 2022.
PM Boris Johnson announced plans to significantly increase funding for health and social welfare for though 2024/25 starting from 2022/23. The fundraising under this Act began through an increase in the rates of National Insurance contributions (NICs) from 6 April 2022 of 1.25 percentage points.
As per the norms under the Act, individuals working above State Pension age from 2023 would be mandated to pay NICs on their earnings. In order to fund the plans, the House of Commons had decided on a hike the income tax on dividends from 2023. The Levy would be applicable to employees and employers liable for Class 1 NICs, and to self-employed people liable for Class 4 NICs.
