WORKERS will pay more tax from today as the National Insurance hike officially kicks in.
The 1.25 percentage point rise will mean someone earning £20,000 will pay £130 extra each year, while someone on £60,000 will pay £630 more.
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Boris Johnson marched ahead with the unpopular tax whack despite anger from Tory MPs furious he was breaking an election pledge not to raise NICs.
Hard-pressed Brits had also urged him to think again as they battle a cost of living onslaught.
But the PM insists he needs to raise billions to clear the NHS backlog and help ease crippling social care costs for the elderly.
From July NICs thresholds will be raised from £9,880 to £12,570 to cushion the tax blow by allowing people – especially lower earners – to keep more of their cash.
It means anyone earning less than £36,000 will pay less tax in the long term, while higher earners will cough up more.
If you want to calculate how much your wages will be affected then MoneySavingExpert’s take home pay calculator can help you work it out.
Health Secretary Sajid Javid claimed this morning that the top 15 per cent of earners will foot 50 per cent of the costs.
He vowed that in as little as six months patients would see a visible improvement in the quality of NHS care.
Justifying the tax rise he said the Government cannot go deeper into the red and leave the next generation to pick up the bill.
Mr Javid said: “I think it not only is economically wrong and opens up more risk for the public finances, I think it is morally wrong.”
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Next year the NICs increase will appear on tax returns as a standalone Health and Social Care Levy.
Mr Johnson said: “We know this won’t be a quick fix, and we know that we can’t fix waiting lists without fixing social care.
“Our reforms will end the cruel lottery of spiralling and unpredictable care costs once and for all and bring the NHS and social care closer together.
What is National Insurance?
National insurance is a tax paid by workers above a certain level of earnings.
The contributions help fund benefits like the State Pension, sick pay and unemployment benefits.
All UK nationals receive an NI number (and NI card) automatically before they turn 16.
Your NI number helps the government track your earnings and charge the right amount of tax.
You currently pay National Insurance if you’re 16 or over and either:
- an employee earning above £184 a week
- self-employed and making a profit of £6,515 or more a year
The tax is deducted from your wages each month and you can see how much you pay on your payslip.
Once you reach state pension age, you don’t need to pay National Insurance at all.
National Insurance is not the same as income tax, and you pay this separately on your earnings too.
“The Levy is the necessary, fair and responsible next step, providing our health and care system with the long term funding it needs as we recover from the pandemic.”
Rishi Sunak added: “This Government will not shy away from the difficult decisions we need to take to fix our social care system and slash NHS waiting times.”
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