It is a great pleasure to be here today to explain the clauses in this Bill.
The Social Security Contributions and Benefits Act 1992 sets out the earnings and profits on which employees, employers and the self-employed are liable to pay national insurance contributions. Clause 1 of the Bill introduces a new tax, to be known as the health and social care levy, which will be charged on the same basis as national insurance contributions. The levy will be set at 1.25%, and will affect earnings from 6 April 2023 onwards. When individuals or employers are liable for a qualifying national insurance contribution, they will also be liable for the levy. The levy will be payable on the earnings and profits on which those contributions are payable. The qualifying national insurance contributions in question are primary class 1 NICs that employees pay on their earnings, secondary class 1 NICs that employers pay on the earnings of their employees, class 1A and class B NICs that employers pay on benefits in kind received by their employees, and class 4 NICs paid by the self-employed.
This new levy has been introduced to raise funds for health and social care, so it is only right that individuals of all ages who are able to pay should do so. Therefore, individuals over state pension age who would be liable for those contributions were they not exempt will be liable for this levy.