Friday, December 3

Boris Johnson Introduces £ 12 Billion A Year Tax Increase To Pay For NHS And Social Care | Taxes and expenses

Boris Johnson has confirmed that his government will impose a package of tax increases worth 12 billion pounds a year from next April to address the NHS Covid delays and review social care.

The cabinet signed Tuesday morning a controversial 1.25 percentage point increase in national insurance contributions, which will apply to both employers and employees.

Tax on share dividends will also be increased by 1.25 percentage points, in a measure that is expected to raise £ 600 million.

Much of the proceeds will initially go to slashing waiting lists on the NHS, with social care receiving just £ 5.3bn of the £ 36bn expected to raise over the next three years.

From 2023 to 24, once HM Revenue’s computer systems have been updated, the increased NICs will be re-labeled as a health and social care tax, which will appear as a separate line on pay stubs.

At that time, it will be expanded to cover pensioners who are still working, and the earnings will be mortgaged, placed in a separate container by law.

Over time, a growing proportion of the revenue raised will go to social care, allowing the government to implement a new cap on total costs of care, so that no one will have to pay more than £ 86,000 in their lifetime.

Anyone with less than £ 100,000 in savings will receive some state aid under the new system, with fully state-funded care for those with less than £ 20,000.

The prime minister called the plan “the largest recovery program in the history of the NHS,” and said it would also “fix the long-term health and social care problems that have been so cruelly exposed by Covid.”

While the new social care cap will only apply to patients in England, the rate will apply across the UK. The government said health services in Scotland, Wales and Northern Ireland would receive an additional £ 2.2 billion a year.

Health Secretary Sajid Javid is expected to lay out more details on how the money will be spent on the NHS and social care systems, which the government says will be more closely integrated.

The money is intended to fund an additional 9 million procedures on the NHS and allow the health service to operate at 110% of planned activity levels for 2023-24 in an attempt to address the historical backlog of cases after the crisis of Covid.

The decision to break an explicit promise in the manifesto has sparked a backlash among Conservative MPs, while Labor has signaled that the impact of the NIC increases will be borne by younger and lower-income workers.

But Johnson believes voters will accept the tax increase due to the background of the pandemic.

The government wanted to emphasize that the increase in national insurance was progressive, hitting higher-income people the hardest and with more than 6 million lower-income people exempted.

The decision to collect the rate from workers of retirement age is intended to address the perception that older people will not pay their share.

Conservative MPs could be asked to vote on the issue as early as this week, and the government is eager to resolve it before the House of Commons interrupts the party’s annual conferences in fifteen days.

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