Wednesday, May 22, 2024

Boris Johnson proposes a new health and social care tax of 1.25% to increase fund

In England, a new health and social care tax will be adopted throughout the country to fund improvements in the healthcare system and NHS financing. Boris Johnson stated that it will raise £12 billion per year to handle the health crisis created by the Covid epidemic as well as to improve social care.

He acknowledged that the tax violated a campaign pledge, but claimed that “no one’s program” included a global pandemic.

Labour leader Sir Keir Starmer, on the other hand, called the proposal a “sticking plaster.” Experts in social care also cautioned that the funds would be “nowhere near enough” to meet current challenges. From April 2022, the tax will be applied as a 1.25 percentage point increase in National Insurance (NI), which will be paid by both management and employees, before making the transition to a different tax on profits in 2023, which will be calculated in the same way as NI and seem to on an employee’s payslip.

This will be charged by all working individuals, including older employees, and will be “fully ring-fenced” to exclusively be about health and social care costs, according to the government. Share dividend income, which is generated by persons who hold stock in a company, will also be new health and social care tax at a higher rate of 1.25 percent.

According to the Institute for Fiscal Studies, the latest tax rises totaled £14 billion. It claimed that, when combined with those proposed in the March Budget, 2022 will witness the largest tax increases in 40 years. The UK-wide tax would primarily fund health and social care in England, although Scotland, Wales, and Northern Ireland will each receive £2.2 billion to spend on their own services.

Mr. Johnson said that the levy would raise £12 billion each year, with the majority of the money going toward catching up on the NHS delay caused by Covid-19, such as expanding hospital facilities and making room for nine million more visits, scans, and procedures.

A portion of the money – £5.4 billion over 3 years – will be used to make changes to the social care system, with further money promised after that. From October 2023, care expenditures will be capped at £86,000 over a person’s lifetime.

All people with property assets less than £20,000 will have their care costs covered completely by the state, while those with significant assets between £20,000 and £100,000 will have their care costs supported.