Hammond plans long-term care reform and self-employed tax in Budget

Philip Hammond 620px

This week’s Budget will unveil Government plans to overhaul social care and healthcare funding and raise tax rates for the self-employed, according to the Times.

The Budget statement will announce a £1.3bn windfall for councils over the next two years and will be found by cutting existing spending, not through taxation.

As well as the extra cash, Chancellor Philip Hammond will use the Budget speech to announce a review into finding a long-term solution to the issue of social care funding.

Possible options being explored by the Treasury include a ‘care Isa’ that gives consumers a way to save tax-free for their own care.

The Government is also considering letting people withdraw money from their pension pots tax-free to pay for healthcare.

The Times says others options on the table include setting a cap of £72,000 on the amount that citizens pay for healthcare, with the state picking up the rest.

An alternative system would see free healthcare up to a set limit, with further payments split between the individual and the state up to a certain level.

The Chancellor will also announce a 3p tax rise for the self-employed, with national insurance rates rising to 12 per cent.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. Why not encourage people to insure against the costs of LTC by allowing tax relief on the premiums?

    And why impose higher rates of tax on the self employed?

  2. higher rate tax on self employed that are the hub of the country what an incentive just goes to show Hammod has no idea and here we go again use more of your pension for what it was not designed for

  3. Is not the “tax rise” for self-employed merely an increase to NI to put self-employed on the same basis as employed, to reflect the fact they will get the same level of State pension in the future?

  4. Kevin – yes this NIC increase just’ levels the state pension playing field’ now contracting-out has been abolished and has been well-publicised for some time now – so stating it is a tax rise is just journalistic headline grabbing, notwithstanding it is an overall tax rise!!!

  5. So NIC only pays for pensions. The self-employed miss out on unemployment pay, maternity pay, paternity pay, sick pay, redundancy pay, employment tribunals etc, etc. In reality this is more about levelling the tax positions between the self employed and those running small ltd companies that have seen the imposition of 7.5% and 32.5% dividend tax.
    NIC is essentially a disguised income tax that allows the government to claim that they have reduced the basic rate of tax to 20% and the higher rate of income tax to 40%.

  6. Do employees pay class 2 NICS as well then?

  7. Self employed should (1) pay employers class 2 rate asnin effect the employee does (2) have a reduction for the benefits they don’t get – but that is very small

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