UK National Insurance changes to fund NHS

Jan 12 | 2022

On 7 September, 2021 the UK government announced a new 1.25% Health and Social Care Levy to fund investment in the NHS and social care.

The Levy will be effectively introduced from April 2022 when National Insurance contributions for working age employees, self-employed people and employers will increase by 1.25% and be added to the existing NHS allocation.

From April 2023, the Levy will be formally separated from National Insurance contributions (NICs) and also apply to the earnings of individuals working above State Pension age and National Insurance contribution rates will return to 2021 to 2022 levels. From April 2023, receipts from the Levy will go directly for spending on health and social care across all parts of the UK.

To ensure taxpayers understand that their increased contribution is helping fund public services, the UK government is asking employers to include a message for their employees on all payslips between 6 April, 2022 and 5 April, 2023 explaining what these funds will be used for. The message should read ‘1.25% uplift in NICs funds NHS, health & social care’.

National Insurance holiday for employers of veterans

From 6 April, 2021, employers who hire former members of the UK regular armed forces during the first year of their civilian employment will be eligible for a zero-rate of secondary National Insurance contributions for up to 12 months, a potential £5,000 saving. Any earnings of qualifying veterans hired from 6 April, 2021 will be eligible for retrospective National Insurance contributions relief.