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Health and Social Care Levy (Repeal) Bill

The House of Lords is due to consider the Health and Social Care Levy (Repeal) Bill at second reading and all remaining stages on 17 October 2022.

The bill is a government bill comprising three clauses and one schedule. Chancellor of the Exchequer Kwasi Kwarteng presented the bill to the House of Commons on 22 September 2022 and MPs considered it at second reading and all remaining stages on 11 October 2022. The Speaker of the House of Commons has since certified the bill as a money bill. This means it can be presented for royal assent to become an act if the House of Lords does not pass it without amendment within a month.

The bill would repeal the Health and Social Care Levy Act 2021 while maintaining a legislative basis for keeping tax receipts collected under provisions in that act up to and including 5 November 2022.

As explained in an HM Revenue and Customs tax information and impact note on the earlier act’s repeal, the bill would make the intended changes in two main ways:

• First, the bill would cancel the temporary 1.25 percentage point increase in the main classes of national insurance contributions (NICs) introduced in April 2022. The reduced rate would apply from 6 November 2022 for the remainder of the 2022/23 tax year.
• Second, the 1.25% health and social care levy would not come into force as a separate tax from 6 April 2023 as previously planned.

The government has said the budgeted funding increase for health and social care based on forecasted receipts from the repealed taxes will remain in place. This is estimated to have been approximately £13 billion per year. Funding will now come from general taxation instead of the hypothecated taxes.

The government has asked Parliament to fast track the bill to give employers enough time to implement the changes to national insurance rates planned to be effective from 6 November 2022. The Health and Social Care Levy Act 2021 was fast tracked for similar reasons.