Henry Pettitt, Partner at Stephenson Smart in Great Yarmouth, explains how the Government’s tax changes and new plan for supporting the UK’S health and social care system will work.

How will the government’s tax changes from next April affect you?

On 8 September we witnessed one of the biggest announcements to date since the beginning of the pandemic, with tax changes agreed to fund £12bn a year to support the NHS and social care backlog across the UK.

From April 2022 National Insurance contributions (NICs) will increase by 1.25pc for one year only for employees, employers and the self-employed.

This will cover both Class 1 (employee and employer), Class 1A and 1B and Class 4 (self-employed) contributions, although State Pension Age are not impacted by the April 2022 changes.

Essentially if you earn more, you will pay more.

From 2022/23, if you earn around £24,100 you will have to pay in the region of £180 extra in National Insurance, while someone earning £67,000 will contribute another £715.

Health and Social Care Levy

From April 2023 the National Insurance contribution rates will decrease back to the levels of 2021/2022, with the introduction of a new Health and Social Care Levy.

The new ring-fenced levy of 1.25pc will apply to those who pay Class 1 (employee and employer), Class 1A and 1B and Class 4 (self-employed) NICs.

It will also be extended to those over State Pension age who are in work, with employment income or profits from self-employment above £9.568.

The levy will be administered by HMRC and collected through the current reporting and collection procedures for NICs – Pay As You Earn and Income Tax Self-Assessment.

The government will also increase the rate of income tax paid by people who receive dividend income from shares by 1.25% from April 2022.


These tax changes are all part of the need for a long-term solution to funding health and social care, allowing everyone to pool and share risks and resources.

You can read the government’s Plan for Health and Social Care here.

Please contact us if we can help you to plan for these forthcoming tax changes to National Insurance contributions and Income Tax.

Profile: Henry Pettitt ACA CTA


Health - Medicine

Did you find this insight useful?

Why not share online

More Insights from Stephenson Smart

  • Double London Marathon bid

    29th September 2022

    Double London Marathon bid for Dan and Andy

    Dan Jastrzebski, partner at Stephenson Smart and Andy Doyle, IT Manager will be taking on the London Marathon on Sunday, 2 October. Andy will be running his second marathon in the capital to raise money for East Anglia's Children’s Hospices, ...

  • Advisory fuel rates company car by Chris Goad, Partner, Stephenson Smart

    19th September 2023

    Advisory fuel rates for company cars

    Advisory fuel rates company car - an overview by Partner, Chris Goad: New advisory fuel rates for company cars have been published and took effect from 1 September 2023. The guidance states: ‘you can use the previous rates for up to one ...

  • Landlords: Are you ready for Making Tax Digital

    7th September 2021

    Landlords: Are you ready for Making Tax Digital?

    Update: The date for self-employed businesses and landlords with annual business or property income above £10,000 to follow the rules for Making Tax Digital has been moved back to 6 April 2024. Landlords: Are you ready for Making Tax Digital? ...

  • Stephenson Smart Team March

    21st December 2020

    Meet the Team at Stephenson Smart in March

    Meet the Team at Stephenson Smart in March Stephenson Smart acquired an office in March when it took over Alan Day & Co in 2014. The team there provide clients with business and tax advice as well as help with ...

  • Kayleigh Wilson of Stephenson Smart

    23rd March 2021

    Tax Day: Response by Kayleigh Wilson

    Dubbed as ‘Tax Day’, HM Treasury released 30 documents and consultations today as part of their tax policies and consultations update to inform future tax policies. These would normally be published on Budget day but this year they have been ...