New health and social care tax announced
A new health and social care tax has been announced by the government. This will be introduced across the UK to cover the increasing cost of care and NHS funding in England.
Janine Guthrie, a lawyer with specialist care fee expertise, summarises the key points:
- From October 2023 there will be a cap of £86,000 on care costs meaning that no one will pay more than £86,000 towards their care. Please note this is for care costs only, and does not include the cost of accommodation.
- If you have less than £20,000 in assets, you will not have to pay towards your care.
- If you have assets between £20,000 and £100,000, you will be asked to contribute towards your care. Your contribution will be assessed on a means test basis, the details of which are to follow.
- The changes are to be funded from National Insurance contributions which are increasing by 1.25% from April 2022. This increase is to be paid by both employees and employers.
- From April 2023, this additional payment will become a separate tax to be called the Health and Social Care Levy on any earned income which will show separately on your payslip.
- If you are above retirement age, you will still pay this new levy, unlike National Insurance contributions which stop at retirement age unless you are self-employed and pay Class 4 contributions. You stop paying Class 4 contributions at the end of the tax year in which you reach State Pension age.
- Income from share dividends – earned by those who own shares in companies – will also see a 1.25% tax increase.
Our specialist legal team will continue to monitor the situation but if you have any queries about how these changes may affect you or you wish to discuss any social care query, then please do not hesitate to contact us. Call Janine on 01242 514000 or email her via the button below.Email Janine
Janine Guthrie has particular expertise in advising clients on all things concerning care fees, alongside her Court of Protection specialism. This includes advising on contentious and non-contentious deputyship and attorney matters.
She also helps clients with drafting wills, lasting powers of attorney (LPAs) and enduring powers of attorney.
To read the article in full, visit the BBC’s website.