Everything you need to know about Boris Johnson's social care shake-up

Everything you need to know about Boris Johnson's social care shake-up
Everything you need to know about Boris Johnson's social care shake-up

Boris Johnson today announced manifesto-busting tax rises to pay for a major overhaul of the nation's social care system and to boost the NHS

The Prime Minister will hike National Insurance contributions by 1.25 per cent, leaving basic rate taxpayers approximately £180 a year worse off. 

A tax on dividends will also go up by 1.25 per cent in moves which will generate an extra £12billion a year for the Treasury. 

A social care shake-up will see a cap on costs set at £86,000 - the maximum anyone will ever have to pay. 

Below is a breakdown of the key changes.  

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Boris Johnson today announced a manifesto-busting tax rise to pay for a major overhaul of the nation's social care system and to boost the NHS

Boris Johnson today announced a manifesto-busting tax rise to pay for a major overhaul of the nation's social care system and to boost the NHS

The Prime Minister will hike National Insurance contributions by 1.25 per cent, leaving basic rate taxpayers approximately £180 a year worse off

The Prime Minister will hike National Insurance contributions by 1.25 per cent, leaving basic rate taxpayers approximately £180 a year worse off

What has the Prime Minister announced on hiking taxes? 

The Government is introducing a new Health and Social Care levy from April 2022. 

This will see National Insurance contributions increased by 1.25 per cent. It will be paid by all working adults, including those who are over the state pension age. 

The levy will be included in National Insurance contributions for the first year but from April 2023 the levy will be split off and will be visible on pay slips. 

People who earn more will have to pay more. 

So a typical basic rate taxpayer earning £24,100 will contribute an extra £180 a year, approximately £3.46 per week.

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A typical higher rate taxpayer earning £67,100 will contribute an additional £7.16 per week. 

Is that the only tax rise?  

No. Mr Johnson is also increasing an existing tax on dividend payments to ensure that people who receive their income through dividends also contribute more to the cost of social care and running the NHS. 

The dividend tax will also increase by 1.25 per cent.

Taken together, the increase in National Insurance contributions and dividend tax will generate an extra £12billion per year for the Treasury.

This extra money will be used solely by the NHS in the first three years - some £36billion - as the health service deals with the treatment backlog caused by

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