From April 6 onwards, the National Insurance tax will increase by 10% per month, which means it will cost taxpayers hundreds more every year.
Prime Minister Boris Johnson and Chancellor Rishi Sunak insisted that a “progressive” policy and going ahead with the health and care levy are the right things to do at the moment.
But what exactly is National Insurance Tax?
National Insurance tax is a levy on earnings paid by everyone: employees, employers and self-employed workers. It’s mainly used to pay for the NHS, state benefits and also for the state pension.
How much revenue does the government expect to raise with the new National Insurance Tax?
Increases in National Insurance tax from April 2022 are forecast to raise around £14 billion per year, considering £13 billion of those to spend on health and social care after compensating public sector employers for the additional employers National Insurance Tax that they will have to pay.
How much more National Insurance Tax am I going to pay?
Although the National Insurance tax is increasing by 1.25% in April, this figure relates to the rate, which means that for most people contributions are actually increasing by more than 10%.
Find out, according to your wage, how much more of the National Insurance tax you are going to have to pay per month:
Will National Insurance Tax return to its current rate?
Yes! From April 2023, the National Insurance tax will return to its current rate and the extra tax will be collected as a new Health and Social Care Levy. This tax will also be paid by people over State Pension age who continue to work.