Health and Social Care Levy
Taxation in the United Kingdom |
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UK Government Departments |
UK Government |
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Scottish Government |
Welsh Government |
Local Government |
Health and Social Care Levy Act 2021 | |
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Act of Parliament | |
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Long title | An Act to make provision imposing a tax (to be known as the health and social care levy), the proceeds of which are payable to the Secretary of State towards the cost of health care and social care, on amounts in respect of which national insurance contributions are, or would be if no restriction by reference to pensionable age were applicable, payable; and for connected purposes. |
Citation | 2021c. 28 |
Dates | |
Royal assent | 20 October 2021 |
Repealed | 25 October 2022 |
Other legislation | |
Repealed by | Health and Social Care Levy (Repeal) Act 2022 |
Status: Repealed |
Health and Social Care Levy (Repeal) Act 2022 | |
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Act of Parliament | |
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Long title | An Act to make provision for and in connection with the repeal of the Health and Social Care Levy Act 2021. |
Citation | 2022c. 43 |
Dates | |
Royal assent | 25 October 2022 |
Commencement | 25 October 2022 |
Other legislation | |
Repeals/revokes | Health and Social Care Levy Act 2021 |
Status:Spent |
TheHealth and Social Care Levywas a proposedtax in the United Kingdomto be levied by theGovernment of the United Kingdomfor extra health spending, expected to be launched in 2023. Provision for the tax was given under theHealth and Social Care Levy Act(c. 28) and it was designed to deal with the backlog of patients waiting for treatment following theCOVID-19 pandemicas well as to improvesocial care.The tax, which was initially to be raised from a 1.25% increase inNational Insurancecontributions, was expected to raise £12 billion a year.
Details of the Health and Social Care Levy were announced in theHouse of Commonsby Prime MinisterBoris Johnsonon 7 September 2021, with plans for its introduction in April 2023. Under the proposals, there was firstly a rise in National Insurance contributions before a separate tax on earned income would have been introduced from 2023, and be calculated in the same way as National Insurance, except that it would also have been paid by those who have reached State Pension Age. The new tax would appear on individual payslips.[1]At the same time it was confirmed that a share of the tax would also go to theNHS in Scotland,NHS in Walesand Northern Ireland'sHealth and Social Caresystem, with an extra £1.1bn for Scotland, £700m for Wales, and £400m for Northern Ireland.[2][3][4]
The proposals attracted criticism from somebackbench MPsin Johnson'sConservative Partywho accused him of reneging on a manifesto commitment made at the2019 general electionnot to increase tax contributions.[5]In response to this criticism, Johnson accepted the tax broke a manifesto pledge, but argued the "global pandemic was in no-one's manifesto".[1]Senior figures in the care sector also expressed their concern the Health and Social Care Tax would not address problems with the system, with Nadra Ahmed, the executive chairman of theNational Care Associationdescribing it as "misleading because the body of the plan [is] about NHS recovery".[6]Political parties in Northern Ireland criticised the plans as "inequitable" and "regressive".[4]On 12 September 2021,HM Revenue and Customspredicted the tax would have a "significant" impact on wages, inflation, and company profits, and could also lead to the breakdown of families. In response, Health SecretarySajid Javidsaid it was the fairest way to fund investment.[7]
On 8 September 2021, MPs voted in favour of the tax rise plan by 319 votes to 248, a majority of 71.[8]On 14 September, the Health and Social Care Levy Bill, the legislation enacting the tax, passed its third reading in the House of Commons with MPs voting 307–251 in favour, a majority of 56.[9]
The new levy along with the increase in national insurance contributions which was implemented the previous year was reversed by new chancellor of the exchequerKwasi Kwartengunder theTruss ministry.The increased NICs which had already been applied would revert to 12% from 6 November 2022.[10]
References
[edit]- ^ab"Boris Johnson outlines new 1.25% health and social care tax to pay for reforms".BBC News.7 September 2021.Archivedfrom the original on 7 September 2021.Retrieved7 September2021.
- ^"Scottish NHS to receive £1.1bn from UK-wide social care tax".BBC News.7 September 2021.Archivedfrom the original on 7 September 2021.Retrieved7 September2021.
- ^"Wales to get extra cash from new NHS and social care tax".BBC News.7 September 2021.Archivedfrom the original on 7 September 2021.Retrieved7 September2021.
- ^ab"Boris Johnson's new tax plans criticised by NI political parties".BBC News.7 September 2021.Archivedfrom the original on 7 September 2021.Retrieved7 September2021.
- ^"How Johnson quelled Tory anger over manifesto-breaking tax rise".The Guardian.7 September 2021.Archivedfrom the original on 11 September 2021.Retrieved11 September2021.
- ^"Social care backlash grows after MPs vote through tax plan".The Guardian.8 September 2021.Archivedfrom the original on 11 September 2021.Retrieved11 September2021.
- ^"Health tax could increase family breakdown, tax authority warns".BBC News.12 September 2021.Archivedfrom the original on 12 September 2021.Retrieved12 September2021.
- ^"Social care tax rise: Boris Johnson wins Commons vote".BBC News.8 September 2021.Archivedfrom the original on 8 September 2021.Retrieved8 September2021.
- ^"Social care won't get money it needs, warns Jeremy Hunt".BBC News.14 September 2021.Archivedfrom the original on 14 September 2021.Retrieved14 September2021.
- ^"National Insurance rise to be reversed in November".BBC News.22 September 2022.Retrieved22 September2022.