Social care tax hike heaps further pressure on business The government’s tax hike to fund social care reforms is short-sighted given the challenges already facing firms, business leaders said today. A new UK-wide 1.25 per cent health and social care levy will be introduced from April 2022, based on national insurance contributions. The government says the move will generate £36bn towards social care reforms over the next three years in “the biggest catch-up programme in the NHS’ history.” The levy will be paid by working adults, including people over the state pension age - unlike normal national insurance, which is not paid by pensioners. Initially, national insurance contributions rates will go up by 1.25 per cent. But from April 2023, once tax systems have been updated, the levy will be separated, so that it appear separately on pay slips. At this point working adults above state pension age will start contributing. The government will also increase the rates of dividend tax by 1.