Overview

The Health and Social Care Levy (Repeal) Bill aims to abolish the Health and Social Care Levy, introduced in 2021 to fund the National Health Service (NHS) and social care. The Bill repeals the 2021 Act establishing the Levy but maintains adjusted National Insurance Contribution (NIC) rates for the 2022-23 tax year as a transitional measure.

Description

This Bill primarily repeals the Health and Social Care Levy Act 2021. However, it includes transitional provisions to manage the change. These provisions address the National Insurance Contribution (NIC) rates for the tax year 2022-23, ensuring a smooth transition away from the levy. Specific adjustments are made to primary Class 1, secondary Class 1, Class 1A, Class 1B, and Class 4 NIC rates. The Bill also includes a schedule outlining further transitional and consequential measures, including adjustments to annual maximum contributions and provisions for allocating the additional NICs collected during the 2022-23 tax year. The Treasury is granted the power to make further regulations as needed, following this repeal. Modifications made by the bill are not to be considered when determining the rates for the tax year 2023-24.

Government Spending

The repeal of the Health and Social Care Levy will significantly impact UK government spending. While precise figures aren't explicitly stated in the provided text, the Levy was projected to raise substantial funds for the NHS and social care. Its repeal will mean that these funding sources will be absent, likely necessitating alternative funding mechanisms to offset the loss of revenue.

Groups Affected

The following groups are affected by this bill:

• Taxpayers: The repeal removes the additional levy on National Insurance contributions. However, the transitional provisions mean that increased NIC rates remain in effect for the 2022-23 tax year.
• NHS and Social Care: These sectors face a substantial reduction in funding, potentially impacting services and staffing. The government will need to find alternative funding solutions.
• Employers: Employers who paid the levy on behalf of employees will no longer be liable for it following the 2022-23 tax year, but had to pay the increased rates during that year.
• Treasury: The Treasury will experience a loss of revenue due to the repeal of the Levy.

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