Box D: The new employment tax

Paul Mortimer-Lee

National Institute UK Economic Outlook, 2021, issue 4, 29-31

Abstract: In September, the government announced a new Health and Social Care Levy: initially a surcharge on existing National Insurance contributions, but with an extension to dividends. The levy will be 1.25 per cent on employee NICs and 1.25 per cent on employers, in total it is expected to raise some U+00A314 billion per year, though there will be a refund of around U+00A32 billion to public sector employers to compensate them for their higher costs. The net increase in revenues, U+00A312 billion, is equivalent to about 0.6 per cent of Gross Domestic Product (GDP).

Date: 2021
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