Addressing the nation on Tuesday afternoon, Prime Minister Boris Johnson announced a painful rise to National Insurance. The tax rises are expected to impact around 25 million working Brits and how much you pay will depend on how much you earn. Here’s how much you will have to pay when the tax is introduced.
The Prime Minister confirmed his plans to raise National Insurance to fund social care.
This tax rise would break the Conservatives manifesto pledge not to raise National Insurance.
National Insurance is a tax paid by all working Brits.
From April next year, National Insurance will increase by an extra 1.25 percent for employees and employers.
How much will this cost you?
Those earning £15,000 currently pay £652 National Insurance each year.
This will rise by £54 to £706 annually.
If you earn £20,000 per year, with the NI hike you will pay an extra £130 a year, while if you earn £30,000, this increase is £255.
Should your salary be £40,000 a year, you will pay £380 extra a year.
For salaries around £50,000 this increase is £505.
Someone on £60,000 a year will see NI payments increase by £630 a year.
A £70,000 earner will pay an extra £755 per year while someone on £80,000 will pay £880.
For someone earning £100,000 annually, NI payments will be going up by £1,130.
And for someone on £130,000 this increase is £1,505 per year.
Boris Johnson said the tax hikes were needed as “governments have dumped this project for decades”.
He added: “There can be no more dither and delay”.
Mr Johnson told MPs the tax rises would stop Brits from the “catastrophic fear of losing everything.”
However he justified the move by saying “a global pandemic was in no-one’s manifesto.”
The rises will raise the billions of pounds needed to fund the PM’s ambitious shake up of the social care system.
Mr Johnson described the tax rise as a “health and social care levy.”
Labour leader Kier Starmer criticised the plans, he said they were simply “sticking plaster over gaping wounds.”
But the PM retorted it was “deeply irresponsible” of Labour not to suggest an alternative plan to fund social care and to deal with the NHS backlog created by the pandemic.
He accused Mr Starmer of having “absolutely no plan”.
He added: “What is his answer to the backlogs in the NHS, what is his answer to the problems in social care?”
The planned changes to social care will only apply in England as Scotland, Wales and Northern Ireland have different arrangements for social care.