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Boris Johnson’s bold move to lift the UK National Insurance Levy - September 2021

nited Kingdoms Prime Minister Boris Johnson has proposed raising taxes to fund public sector expenditure into social-care reforms as well as the National Health Service. From April, Johnson has laid out plans to increase the UK’s National Insurance Levy by 1.25% with tax rates on shareholder dividends to rise by the same amount. According to the government, the increased taxes from 12% to 13.25% by April 2022 will total to $49.6bn with the additional funding to support UK’s health and social care system.


However, Johnson’s decision is facing resistance within his own Conservative Party with concerns amounting over the lost of votes due to the tax hike as well as compromising the Party’s promise to not raise the rate of income or National Insurance tax. A recent snap poll has shown Britons are split 44% supporting to 43% opposing the National Insurance raise. The prime minister mentioned whilst the new tax rate would be a permanent additional investment into health and social care, it would be ‘irresponsible’ to finance the debt accrued over the pandemic through more borrowing. Given the option to increase income tax or capital gains tax, individuals would take upon the entire fiscal burden whereas the new National Insurance levy would share the cost between individuals and businesses according to their means. New social-care reforms will limit the amount individuals pay for care down to $138,000 over their lifetime.


By increasing taxes by 1.25%, Johnson aims to tackle crises within social-care funding and an overwhelmed National Health Service that has emerged amidst escalating pressure on health-care services throughout the COVID-19 pandemic. An analysis by The Nuffield Trust revealed that almost 1.2m people were waiting more than 6 months to access essential health services such as cardiology and brain surgery.


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