Policy background
The Government has announced an increase to health and social care funding. To pay for this, it will introduce a Levy based on NICs which already part-fund the NHS and have historically been the way in which money is raised for social security provision.
	This Act introduces a new 1.25% Health and Social Care Levy which is payable where an employee, employer or self-employed individual has a liability in respect of a "qualifying National Insurance contribution" – Class 1, Class 1A, Class 1B and Class 4 NICs. The levy will also apply if an individual would be liable in respect of a "qualifying National Insurance contribution" were it not for the relevant pension age restrictions. The effect of this is that individuals in work who are over State Pension age will be liable to this Levy. Funds raised from the Levy will be used for the purpose of health and social care.
	This Levy will have effect from April 2023. For the 2022-23 tax year, the Act contains transitional arrangements that provide for a temporary 1.25 percentage point increase to both the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 NICs and a corresponding increase to the NHS allocation. Individuals over State Pension age will not be affected during the 2022-23 tax year.
	Existing legislative provisions relating to the qualifying National Insurance contributions (thresholds, reliefs, reporting, record keeping requirements etc) will apply to the Levy as they apply to the contribution.