§ Mr. Austin Mitchellasked the Secretary of State for Social Services, pursuant to the reply dated 25 March, Official Report, columns 196–97, concerning class 2 and 404W class 4 contributions, whether he will publish in the Official Report a table showing (i) the numbers with earnings-profits above the upper level and (ii) his estimate of the distribution by range of income in each case for 1987–88 or for the most recent year for which figures are available.
§ Mr. MajorInformation on the actual number of class 4 contributors who earn more than the upper profits limit is not available but the estimates shown in the table, which have been derived from the Inland Revenue's income survey for the latest available year, give a good indication of the numbers involved. They will contain some overstatement, which is unlikely to be substantial, as they include those self-employed people not liable to pay class 4 contributions because of being over retirement age or of being concurrently employed earners and paying the maximum National Insurance in class 1 and class 2 contributions.
People with income from self-employment greater than the upper profits limit for class 4 National Insurance contributions (thousands) (United Kingdom) 1984–85 Ranges of self-employment income: Number Upper profits limit (£13,000) to £14,999 57 £15,000 to£ 19,999 98 £20,000 to £24,999 61 £25,000 or above 83 Total number with incomes above the upper profits limit 299 1. The Inland Revenue's income survey is a statistical sample survey of taxpayer's records. 2. Income is defined net of losses, stock relief and capital allowances.
§ Mr. Austin Mitchellasked the Secretary of State for Social Services, pursuant to his reply dated 25 March, Official Report, column 197–98, concerning the cost of a reduction of one percentage point in national insurance contributions, whether he will publish in the Official Report, a table accounting for (i) the difference between the employers' and employees' contributions in terms of higher earnings or reduced rates and (ii) the figure for the employees' contribution at reduced rates; and if he will add figures for the self-employed.
§ Mr. MajorThe information is as follows:
£ million Estimated cost of one percentage point reduction in employers' contribution rates in 1987–88 1,770 Estimated cost of one percentage point reduction in employees' contribution rates in 1987–88 1,590 Difference 180 Accounted for by: Cut in employers' contributions in respect of earnings above the Upper Earnings Limit 105 Cut in employers' contributions in respect of married women who pay the reduced rate: (rate for employees assumed to be static) 60 Cut in employers' contributions in respect of employed earners who do not pay primary contributions 15 A reduction of one percentage point in the reduced rate paid by married women and widows in 1987–88 would cost about £60 million for the full year in reduced employee contributions.
405WClass 2 contributions for the self-employed are not levied on a percentage basis but a reduction of one percentage point in the class 4 (self-employed) contribution rate in 1987–88 would cost about £60 million for the full year.