Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what estimates he has made of the costs to business of (a) the introduction of the Health and Social Care Levy from April 2023 and (b) the transitional increase to the main and additional rates of National Insurance contributions in 2022-23 arising from (i) familiarisation with the changes, (ii) updating software or systems, and (iii) updating employee payroll records.

The announcement of the National Insurance contributions (NICs) increase in the 2022-23 tax year and the introduction of the Health and Social Care levy (HSCL) from 2023-24 onwards will impact 1.6 million employers. Businesses will face one-off costs to familiarise themselves with the changes and to update employee payroll records. The impacts on businesses can be found in the HSCL Tax information and Impact Note which was published by HMRC: https://www.gov.uk/government/publications/health-and-social-care-levy/health-and-social-care-levy.

Family Test assessments are not routinely published. Decisions on whether and how to publish complete Family Test assessments fall within the responsibility of each Government department.

The announcement of the NICs increase in the 2022-23 tax year and the introduction of the HSCL from 2023-24 onwards was made ahead of the announcement of annual changes that payroll software providers make each year. It is expected that these changes will form part of the annual change process for software developers.

An initial estimate of the cost for changes to HMRC’s IT systems and extra support staff was provided to Parliament by the Financial Secretary to the Treasury on 14 September 2021. The initial estimated cost was £40-50 million. A further estimate will be available in due course.