Boris Johnson has made a commitment to provide £25bn for NHS England, approximately £5bn for healthcare in the devolved nations and £5.3bn for social care.
To raise these revenues, two taxes are being raised:
- National Insurance (NIC) – National Insurance contributions will be going up by 1.25% for individuals both employed and self-employed with earnings over £9,568. The National Insurance payment will also rise by a similar amount for employers’ payments. This will be effective from April 2022.Boris Johnson has said “‘Our new levy will share the cost between individuals and businesses, and everyone will contribute according to their means, including those above state pension age, so those who earn more will pay more. Income tax is not paid by businesses so the whole burden would rest on individuals. The new levy will fall on businesses and individuals. And the highest earners will pay the majority. And because we are also increasing dividends tax rates we will be asking better-off business owners and investors to make a fair contribution too”.
- Dividend Tax – An increase at the same level of 1.25% will also apply to dividend taxation.
This is going to come as an unwelcome surprise to many people who rely on their investment income to live. On the US/UK tax side the higher UK tax will not have any impact on the US taxes either and just further increase an individual’s foreign tax credits.
