London Daily

Focus on the big picture.
Sunday, Aug 10, 2025

Health tax could increase family breakdown, tax authority warns

Health tax could increase family breakdown, tax authority warns

Plans to raise National Insurance to fund health and social care could lead to the breakdown of struggling families, the UK's tax authority says.

Ministers announced the tax hike this week to pay for an £86,000 personal cap on lifetime social care costs in England, and tackle NHS backlogs.

HMRC analysis has predicted it will have a "significant" impact on wages, inflation, and company profits.

Health Secretary Sajid Javid said it was the fairest way to fund investment.

But also speaking on Sunday, Labour's Shadow Health Secretary Jonathan Ashworth called the proposals a "punishing unfair tax rise on working people".

The 1.25 percentage point rise in National Insurance (NI), a tax paid by workers and employers, will begin next April, before becoming a separate Health and Social Care Levy from April 2023.

Along with a 1.25 percentage point hike in dividend tax from next April, it is expected to raise £12bn a year for the next three years.

Analysis prepared for the government by HMRC, published after MPs backed the changes last week, said in 2022-23 a worker on the median basic rate taxpayer's income of £24,100 would be expected to pay an additional £180 per year.

Employees on the median higher rate taxpayer's income of £67,100 would be expected to pay an additional £715, the document added.

It added: "There may be an impact on family formation, stability or breakdown as individuals, who are currently just about managing financially, will see their disposable income reduce."

The analysis also forecast the increase would impact companies' decisions on hiring staff, and setting salaries.

And it said turning the NI increase into a separate levy - meaning it would appear as a separate line on workers' pay slips - would mean extra staff costs for HMRC.


The majority of the £36bn fund raised by the rise over the next three years will go towards tackling the backlog of NHS cases, which has worsened during the Covid pandemic.

A smaller portion of the money - £5.4bn over the next three years - will also go towards changes to the social care system.

The government has promised the share going to social care will increase after that, but has not specified exactly by how much.

Labour has criticised the tax hike as unfair to working people, and said it would not do enough to improve care offered in the social care system.

The party said it backed more spending on health and social care - but has been coming under pressure to specify how they would pay for it instead.

'Fairest way possible'


Leader Sir Keir Starmer recently said the money could be raised through taxing landlords. He has also said it could be funded through "wealth taxes", but has not set out details.

On Sunday, Mr Ashworth told the BBC's Andrew Marr programme that improving care for people in their own homes, so that they did not have to move into a care home, could save £2.5bn a year that could be spent on "the front line".

Speaking on the same programme, Mr Javid defended the tax hike, adding it would make government support for social care "more generous" and said paying for the changes through higher borrowing would be "wrong".

"The way this has been done, through a broad-based progressive tax, is the fairest way possible to support us all, for our health needs and our care needs," he added.

After backing the proposals last week, MPs will vote on the legislation to set up the new health and social care levy next week.

Newsletter

Related Articles

0:00
0:00
Close
Street justice isn’t pretty but how else do you deal with this kind of insanity? Sometimes someone needs to standup and say something
Armenia and Azerbaijan sign U.S.-brokered accord at White House outlining transit link via southern Armenia
Barcelona Resolves Captaincy Issue with Marc-André ter Stegen
US Justice Department Seeks Release of Epstein and Maxwell Grand Jury Exhibits Amid Legal and Victim Challenges
Trump Urges Intel CEO Lip-Bu Tan to Resign Over Alleged Chinese Business Ties
Scotland’s First Minister Meets Trump Amid Visit Highlighting Whisky Tariffs, Gaza Crisis and Heritage Links
Trump Administration Increases Reward for Arrest of Venezuelan President Maduro to Fifty Million Dollars
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
OpenAI Launches GPT‑5, Its Most Advanced AI Model Yet
Embarrassment in Britain: Homelessness Minister Evicted Tenants and Forced to Resign
President Trump nominated Stephen Miran, his top economic adviser and a critic of the Federal Reserve, to temporarily fill an open Fed seat
The AI-Powered Education Revolution: Market Potential and Transformative Impact
Chikungunya Virus Outbreak in Southern China: Over 7,000 Hospitalized
French wine makers have seen catastrophic damage to vines that were almost ready to be harvested after the worst fires in more than 70 years burned through the south of the country
US Lawmaker Probes Intel CEO’s China Ties Amid National Security Concerns
Brazilian President Lula says he’ll contact the leaders of BRICS states to propose a unified response to U.S. tariffs
Trump Open to Meeting Putin as Soon as Next Week, with Possible Trilateral Summit Including Zelenskiy
Katy Perry and Justin Trudeau spark dating rumors, joining high stakes world of celeb-politician romances
US envoy Steve Witkoff arrived in Moscow to seek a breakthrough in the Ukraine war ahead of President Trump’s peace deadline
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Karol Nawrocki Inaugurated as Poland’s President, Setting Stage for Clash with Tusk Government
Trump Signals JD Vance as ‘Most Likely’ MAGA Successor for 2028
US Charges Two Chinese Nationals for Illegal Nvidia AI Chip Exports
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
U.S. Tariff Policy Triggers Market Volatility Amid Growing Global Trade Tensions
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
Representative Greene Urges H-1B Visa Cuts Amid U.S.-India Trade Tensions
U.S. House Committee Subpoenas Clintons and Senior Officials in Epstein Investigation
Sydney Sweeney Registered as Republican as Controversial American Eagle Ad Sparks Debate
Trump Accuses Major Banks of Politically Motivated Account Denials and Prepares Executive Order
TikTok Removes Huda Kattan Video Over Anti-Israel Conspiracy Claims
Trump Threatens Tariffs on India Over Russian Oil Imports
German Finance Minister Criticizes Trump’s Attacks on Institutions
U.S. Proposes Visa Bond of Up to $15,000 for Some Applicants
U.S. Farmers Increase Lobbying Amid Immigration Crackdown
Elon Musk Receives $23.7 Billion Tesla Stock Award
Texas House Paralyzed After Democrats Walk Out Over Redistricting
Mexican Cartels Complicate Sheinbaum’s U.S. Security Talks
Mark Zuckerberg Declares War on the iPhone
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
Tesla Seeks Shareholder Approval for $29 Billion Compensation Package for Elon Musk
Nvidia is cutting prices on its RTX 50-series graphics cards after sales slowed and inventories piled up
Ghislaine Maxwell Transferred to Minimum-Security Prison Amid Ongoing DOJ Discussions
U.S. Tariffs Surge to Highest Levels in Nearly a Century Under Second Trump Term
×