New Health and Social Care Levy
The UK government announced a new Health and Social Care levy that will increase National Insurance contributions paid by most workers in the UK. The new levy is set to begin in the tax year beginning April 2023, but the increase to National Insurance contributions will begin in April 2022.
This new 1.25% increase to National Insurance contributions will impact most workers, with an effective increase in payroll taxes of 2.5%. This is the highest level of tax ever seen before in the UK, due to several factors and increasing demands on health care and social services. The highest earners in top 14% of the UK population will pay about half of the expected revenue they plan to raise from the increase, while about 40% of small businesses and workers making less than £9568 will not pay any increase.
Preparing your payroll now for the coming changes will help ease the burden for your team when the new changes roll out. Making sure your software updates for the new changes, create reporting to identify those affected, and communicating with your employees will help ensure employees are aware of the change and when it will be deducted from their payroll.
If your payroll process is struggling to keep up with new changes to regulations, talk to our team. We have a cloud-based payroll platform with automated updates to new regulations, customized reporting, and CIPP-certified experts to help when questions come up. Simplify your payroll and prepare for new regulations coming soon. Click here to learn more