Health & Social Care Levy - FAQ's Update
The Health and Social Care Levy will no longer go ahead. Additionally, from 6 November 2022, the temporary 1.25 percentage point increase in National Insurance rates is being reversed for the rest of the financial year.
The impact of this change is twofold. Firstly, from 6 November 2022 the main and additional rates of Class 1, Class 1A, Class 1B and Class 4 NICs will reduce, in effect removing the temporary 1.25 percentage point increase legislated in section 5 of the Health and Social Care Levy Act 2021 for the remainder of the 2022-23 tax year.
Secondly, the 1.25% Health and Social Care Levy will not come into force as a separate tax from 6 April 2023 as previously planned.
Claims in payment
Q: Where employer NICs are covered, will the NIC benefit paid, automatically reflect the NIC liability applicable at the ‘date first absent’?
A: Where the ‘date first absent’ falls on or after 6 April 2022 but before 6 November 2022, benefit payments will reflect the enhanced level of NIC at the commencement of benefit payment, and will not reduce as a result of any future reduction in NIC.
ACCOUNTS AND COSTING
Q: Where employer NICs are covered, how do these changes affect the costing of schemes ?
A: firstly, we can confirm that no increases in rates were required specifically in respect of the temporary change in NICs. However, for schemes costed in terms of benefit, an adjustment to the premium will be made via usual mid-term adjustment accounting methods.
For schemes costed in terms of salary, there will be no impact on the premium due.
If you would like to discuss any of the above in relation to a specific Scheme or set of circumstances, please contact our Business Development team via email email@example.com