In a summary document of the Health and Social Care Levy published by the House of Commons Library yesterday, it stated that the measure is expected to have a ‘significant impact on over 1.6m employers who will be required to introduce this change’, although the government has not published a precise estimate.

After its third reading in parliament yesterday, the Health and Social Care Levy Bill was passed with MPs voting 301 to 251 with a majority of 56 to approve the introduction of the 1.25% hike in National Insurance contribution (NIC) rates. Effective from April 2022, it is set to raise £12bn annually.

The impact on businesses will be due to the administrative burdens such as familiarisation with the change and the updating of payroll systems.