What is the new Health and Social Care Tax?
As many are aware the government recently announced an extra tax to fund social care in England and help the NHS recover after the pandemic. This will be funded by employees, employers and the self-employed all paying 1.25p more in the pound for National Insurance (NI) from April 2022.
But from April 2023, National Insurance will return to its current rate and the extra tax will be collected as a new Health and Social Care Levy. This levy – unlike National Insurance – will also be paid by state pensioners who are still working.
The changes to National Insurance will hit many small business owners and employees alike.
Given the pandemic it was inevitable that changes would be made to taxation to support the NHS and now the newly announced Social Care Reform.
National Insurance has been untouched for many years and this may well be the first of many changes to tax in the coming years.
The cap on care costs of £86,000 will come as positive news to many, but it’s important to note this only relates to the cost of care when much of the cost for someone in residential care is for bed and board which will not be capped.
Changes to the care system are long overdue and this is a first step, but the reform can’t stop there in supporting those with care needs who have been left to fend for themselves for so long.
Here at Cranwell Wealth Solutions we specialise in long-term care advice, so please do book an appointment if you would like to discuss your options without any obligation.
Why not visit one of our high street branches in either Uckfield or Heathfield. Appointments or walk ins very welcome.
21 Church Street Uckfield or 56 High Street Heathfield. www.cranwellws.co.uk
Article kindly contributed by by Peter Morris of Cranwell Wealth Solutions