In its report on the impact of the Autumn Budget the committee highlighted that the Office for Budget Responsibility (OBR) forecast that the introduction of the social care levy would raise approximately £12.5bn per year in net additional government spending capability.

The gross amount which the measure would raise is forecast to be approximately £17bn per year, but this yield would be reduced, firstly by lower wage settlements for workers from their employers.

The report also noted that the Treasury will cover the NICs’ increase for government departments and will underwrite this cost for public sector employers, rather than increasing individual departmental budgets.

By increasing the level of taxation through National Insurance, the levy will affect employees whose income comes from wages, and on companies who employ workers. There would have been a wider impact on taxpayers if the government had raised income tax rates as it would have covered income that individuals earn from other sources such as rental income, or pension income, as well as income from wages.