Cumbria Chamber extremely concerned about new Health and Social Care Levy impact on business

Cumbria Chamber of Commerce is extremely concerned about the impact on business of changes to National Insurance and the new Health and Social Care Levy.

To tackle NHS backlogs and to overhaul the social care system, the changes will see a 1.25% rise in National Insurance paid by both employers and employees, including pensioners still in work, from April 2022, converting to a Health & Social Care Levy from 2023. The tax share on dividends will also increase by 1.25% and from 2023 it will become a separate tax based on income earned.

An aging population with increasing demand, fewer people receiving the care they need and cuts to local authority spending on social care are the current problems the sector is facing. The intention also is to use much of the revenue generated initially to address backlogs in the NHS as a result of Covid.

While it is widely accepted that change is needed within the system and that greater investment is long overdue, there are varying views on how this should be funded but widespread condemnation of the plans announced.

Once again businesses are being put in a difficult position, with this increase in costs at an already fraught time for businesses.

Commenting on the announcement, Cumbria Chamber of Commerce Managing Director Suzanne Caldwell said: “While it’s clear that significant action is needed to “fix” our social care system, how do we best fund it? It’s certainly not an easy one and every potential answer will be unpalatable to some.

“But whatever anyone’s political views there has to be a concern about doing this through National Insurance/the Levy at the current time, increasing the burden on employers at a time when so many are still emerging from the challenges of the pandemic and facing the cost of paying back Covid loans and hikes in costs of transport, raw materials and wages.”

She also added: “Businesses generate prosperity, create jobs and support communities. The focus should be on creating the best possible environment for them to grow and thrive so they can sustainably deliver the tax revenue needed to support our public services and the wider economy. This includes enabling investment in growth, upskilling and productivity gains as we move forward.

“So rather than adding to the financial pressures already facing businesses, the government should be acting to support businesses and stimulate investment and growth.

“There has been much made in the media of the regressive impact of this levy on individuals, but the same applies to businesses and sole traders, with no without meaningful regard for how their business is performing.

“In addition to the levy, those running companies, many of whom were left out of pandemic support measures, face a fresh and unexpected assault on dividend revenue, impacting further on business growth and investment.

“As a Chamber of Commerce, our focus and remit are squarely on business so it would not be appropriate for us to comment on the impact on individuals. But everyone will be impacted by inevitable price rises as businesses face spiralling costs.

“Given how fundamental this issue is for us as a nation and our economy, surely the best way forward would be a cross party task force, working actively with business organisations and other stakeholders, to look at the options and make recommendations, working together to find the best solution.”

If businesses wish to highlight any concerns, or need some advice and support then they can get in touch with Cumbria Chamber of Commerce by emailing

© Cumbria Chamber of Commerce