UK workers to see 1.25% tax increase from next year

September 13, 2021

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Workers in the United Kingdom will see their monthly tax payments increase by 1.25% from April 2022, as the Government seeks to bring in extra funding to help the country’s National Health Service (NHS) and social care sector recover from the coronavirus pandemic.

Earmarked to generate an extra £12bn of funding per year, the tax increase will be introduced from April next year initially as a rise in National Insurance before becoming an entirely new tax on pay cheques from 2023. The money will be ring-fenced to only go towards health and social care costs.

The onset of the coronavirus pandemic has seen the NHS struggle with demand as waiting lists and backlogs continue to build. Earlier in the month, it was revealed that an estimated 5.6 million people are currently waiting for treatment.

Elsewhere, President Joe Biden’s $3.5 trillion stimulus package faces opposition from within his own Democratic party. Forming the USA’s fourth stimulus package to help weather the storm of the pandemic, some members of the Democrats, such as Senator Joe Manchin, believe the amount is too much and are pushing for a lower figure to be agreed upon with a possible $2trn ceiling.

In Japan, data showed that household spending grew by 0.7% year-on-year in July compared with expectations of a 2.4% rise, as a resurgence in COVID-19 cases hindered consumer activity. A positive contribution came largely from transportation, followed by a smaller degree of support from the food and beverage sector. Most other categories dragged, led by furniture and household goods as well as health care.

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