The launch of a social care levy from 2022 will see taxpayers facing a 1.25% tax charge under government plans, while dividend tax will also rise.
From April 2022, the government will introduce a new, UK-wide 1.25% Health and Social Care Levy, ringfenced for health and social care. This will be based on National Insurance contributions (NICs) and from 2023 will be legislatively separate.
All working adults, including those over the state pension age, will pay the levy and the rates of dividend tax will also increase by 1.25% to help fund this package.
There will also be changes to the amount of savings people can retain when facing a move into care costs and a cap on total cost liability for anyone paying for care home accommodation and care.
The new tax is set to raise £12bn a year and marks a major departure from the Conservatives’ manifesto which committed to the triple lock on income tax, national insurance and VAT.
Further details can be found at http://www.gov.uk/government/news/record-36-billion-investment-to-reform-nhs-and-social-care.