National Insurance contributions will increase from April 2022, the prime minister has announced, as part of a 1.25% health and social care levy designed to support the NHS.
Boris Johnson said the levy would fund "the biggest catch-up programme in NHS history", tackling the backlogs of appointments, scans and operations that have built up during the pandemic and increasing hospital capacity.
Dividend tax rates will increase by the same amount and the UK-wide levy is hoped to raise almost £36b over the next three years, which will go directly to health and social care facilities across the UK.
Johnson said most small businesses would not contribute, around 40% of businesses in total, as although the cost would be shared "between individuals and businesses", he added, "those who earn more will pay more". No one earning less than £9,568 will pay.
"It would be wrong for me to say that we can pay for this recovery without taking the difficult but responsible decisions about how we finance it," he said, speaking in Parliament today.
Initially National Insurance contributions rates will go up by 1.25%, but from April 2023 the levy will be separated on payslips.
Photo: Flickr / UK Parliament