Boris Johnson announced a £12bn annual tax rise to fund a big increase in health and social care spending in England. It was a defining moment that infuriated many in his own party. But what exactly does the tax hike entail?
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The plan to increase national insurance contributions (NICs) by 1.25 percentage points for both employers and employees breaches Boris Johnson’s election ‘guarantee’ that he could fix social care without putting up key taxes ft.com/content/eceaf8…
The UK prime minister said that money from the higher national insurance rates — rebranded a ‘health and social care levy’— would gradually be used to pay for long-term social care reforms. The levy will also be paid by pensioners who are working ft.com/content/eceaf8…
The tax rise — which takes effect from April 2022 — will initially pay for £36bn of emergency NHS funding spread over three years, to help deal with the backlog in treatment caused by the Covid crisis ft.com/content/eceaf8…
Parallel to the increase in NICs, there will be an equivalent 1.25 percentage point increase in taxation of dividends, to address claims that the new policy weighed unfairly on people on low earnings and did not hit the better-off ft.com/content/eceaf8…
UK ministers are also expected shortly to scrap the pensions ‘triple lock’ to avoid giving the elderly a big state pension increase next year — breaching another manifesto promise ft.com/content/eceaf8…
Prime minister Boris Johnson is buoyed by opinion polling, suggesting the public is prepared to pay more in tax for better hospital and care provision ft.com/content/eceaf8…
At the heart of the social care plan is an £86,000 cap on the amount any individual can pay, a move that Johnson argues will remove the need for people to sell their homes to pay for residential care. Read the full story here: ft.com/content/eceaf8…
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