Contractor's Tools
IR35 News
Recruiter FAQs

Are you switching from Limited Company to Umbrella Employment? Click here to calculate your take home pay >>

We have created an information hub to support our Orange Genie Accountancy clients, our Umbrella Employees and agencies where the Covid-19 rules and legislation are explained for recruiters, contractors and the self-employed. Click here to find out more>>

The Health and Social Care Levy: What Contractors Need to Know

Following the House of Commons Vote on Wednesday 8th September, MPs have backed the proposed Health and Social Care Levy, which will start as an increase to National Insurance Contributions (NICs) in April 2022.

Choosing a Tax Efficient Salary: Download our FREE guide>>

Employees:

Employees, including umbrella company employees, will see a 1.25% rise in employee NICs.

Self-employed contractors

The increase also applies to Class 4 NICs, so self-employed contractors whose profits exceed the threshold will also pay 1.25% more.

Limited company directors

Salary payments made to Limited company directors will be affected by the increase to both employees and employers NICs. The tax on dividends is rising by the same amount, so directors who take the majority of their pay as dividends will also experience a tax increase.

Employers

The 1.25% rise also includes employer’s NICs, which means employers, including umbrella companies, will pay more National Insurance on payments made to their employees.

What the Government says about the Levy

The Government expects the levy to raise almost £36 billion over three years, and has promised this money will go straight to frontline NHS and social care services.

The Prime Minister has acknowledged that this breaks a key Conservative manifesto pledge not to raise taxes, saying “a global pandemic was on no-one’s manifesto”.

When will the levy take effect?

The increase to NICs and dividend tax will take effect from April 2022. From 2023 it will be listed on payslips as a separate Health and Social Care levy.

If you have questions or if we can help in any way, please call our expert team on 01296 468483 or email info@orangegenie.com.

Request a Call Back

 

edge promo