Health and Social Care Levy Act 2021
Act of Parliament
Parliament of the United Kingdom
Long titleAn Act to make provision imposing a tax (to be known as the health and social care levy), the proceeds of which are payable to the Secretary of State towards the cost of health care and social care, on amounts in respect of which national insurance contributions are, or would be if no restriction by reference to pensionable age were applicable, payable; and for connected purposes.
Citation2021 c. 28
Dates
Royal assent20 October 2021
Repealed25 October 2022
Other legislation
Repealed byHealth and Social Care Levy (Repeal) Act 2022
Status: Repealed
Health and Social Care Levy (Repeal) Act 2022
Act of Parliament
Parliament of the United Kingdom
Long titleAn Act to make provision for and in connection with the repeal of the Health and Social Care Levy Act 2021.
Citation2022 c. 43
Dates
Royal assent25 October 2022
Commencement25 October 2022
Other legislation
Repeals/revokesHealth and Social Care Levy Act 2021
Status: Spent

The Health and Social Care Levy was a proposed tax in the United Kingdom to be levied by the Government of the United Kingdom for extra health spending, expected to be launched in 2023. Provision for the tax was given under the Health and Social Care Levy Act (c. 28) and it was designed to deal with the backlog of patients waiting for treatment following the COVID-19 pandemic as well as to improve social care. The tax, which was initially to be raised from a 1.25% increase in National Insurance contributions, was expected to raise £12 billion a year.

Details of the Health and Social Care Levy were announced in the House of Commons by Prime Minister Boris Johnson on 7 September 2021, with plans for its introduction in April 2023. Under the proposals, there was firstly a rise in National Insurance contributions before a separate tax on earned income would have been introduced from 2023, and be calculated in the same way as National Insurance, except that it would also have been paid by those who have reached State Pension Age. The new tax would appear on individual payslips.[1] At the same time it was confirmed that a share of the tax would also go to the NHS in Scotland, NHS in Wales and Northern Ireland's Health and Social Care system, with an extra £1.1bn for Scotland, £700m for Wales, and £400m for Northern Ireland.[2][3][4]

The proposals attracted criticism from some backbench MPs in Johnson's Conservative Party who accused him of reneging on a manifesto commitment made at the 2019 general election not to increase tax contributions.[5] In response to this criticism, Johnson accepted the tax broke a manifesto pledge, but argued the "global pandemic was in no-one's manifesto".[1] Senior figures in the care sector also expressed their concern the Health and Social Care Tax would not address problems with the system, with Nadra Ahmed, the executive chairman of the National Care Association describing it as "misleading because the body of the plan [is] about NHS recovery".[6] Political parties in Northern Ireland criticised the plans as "inequitable" and "regressive".[4] On 12 September, HM Revenue and Customs predicted the tax would have a "significant" impact on wages, inflation, and company profits, and could also lead to the breakdown of families. In response, Health Secretary Sajid Javid said it was the fairest way to fund investment.[7]

On 8 September MPs voted in favour of the tax rise plan by 319 votes to 248, a majority of 71.[8] On 14 September the Health and Social Care Levy Bill, the legislation enacting the tax, passed its third reading in the House of Commons with MPs voting 307–251 in favour, a majority of 56.[9]

The new levy along with the increase in national insurance contributions which was implemented the previous year was reversed by new chancellor of the exchequer Kwasi Kwarteng under the Truss ministry. The increased NICs which had already been applied would revert to 12% from 6 November 2022.[10]

References

  1. 1 2 "Boris Johnson outlines new 1.25% health and social care tax to pay for reforms". BBC News. 7 September 2021. Archived from the original on 7 September 2021. Retrieved 7 September 2021.
  2. ↑ "Scottish NHS to receive £1.1bn from UK-wide social care tax". BBC News. 7 September 2021. Archived from the original on 7 September 2021. Retrieved 7 September 2021.
  3. ↑ "Wales to get extra cash from new NHS and social care tax". BBC News. 7 September 2021. Archived from the original on 7 September 2021. Retrieved 7 September 2021.
  4. 1 2 "Boris Johnson's new tax plans criticised by NI political parties". BBC News. 7 September 2021. Archived from the original on 7 September 2021. Retrieved 7 September 2021.
  5. ↑ "How Johnson quelled Tory anger over manifesto-breaking tax rise". The Guardian. 7 September 2021. Archived from the original on 11 September 2021. Retrieved 11 September 2021.
  6. ↑ "Social care backlash grows after MPs vote through tax plan". The Guardian. 8 September 2021. Archived from the original on 11 September 2021. Retrieved 11 September 2021.
  7. ↑ "Health tax could increase family breakdown, tax authority warns". BBC News. 12 September 2021. Archived from the original on 12 September 2021. Retrieved 12 September 2021.
  8. ↑ "Social care tax rise: Boris Johnson wins Commons vote". BBC News. 8 September 2021. Archived from the original on 8 September 2021. Retrieved 8 September 2021.
  9. ↑ "Social care won't get money it needs, warns Jeremy Hunt". BBC News. 14 September 2021. Archived from the original on 14 September 2021. Retrieved 14 September 2021.
  10. ↑ "National Insurance rise to be reversed in November". BBC News. 22 September 2022. Retrieved 22 September 2022.
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