Boris Johnson made his announcement yesterday of the additional National Insurance levy to be paid to help the NHS and fund Social Care and in addition added 1.25% to the rate of dividend tax payable.
Leaks from Whitehall centred around the intended increase in National Insurance that will take effect from April 2022 and how it broke the Government manifesto promise of no tax nor national insurance increases during the term of this Government.
The exact details of how the increment will be applied between employers, employees and self-employed is yet to be published.
What was below the radar was the intended increase in the rate of dividend tax, again from April 2022. The previous 7.5% for basic rate tax payers will increase to 8.75% , with higher rate increasing from 32.5% to 33.75% and upper rate increasing from 38.1% to 39.35%.
Hopefully, the additional monies generated will alleviate the backlog of consultations and operations and go a long way to improving your working environment. Similarly, for social care any additional money is badly needed.
Although much was publicised about breaking the manifesto promise everyone was acutely aware that money was needed to be found to help the NHS and Social Care to recover from the pandemic.
On 27 October 2021 Rishi Sunak will give his half yearly budget update and no doubt further leaks will surface prior to any announcement.