§ Mr. Frank Cook
To ask the Secretary of State for Social Security what was the amount of employees' national insurance contributions collected by employers and subsequently not paid in to the Treasury in 1988, with a regional breakdown; what was the number of cases of national insurance evasion or fraud by employers where his Department took civil proceedings against the employer and the amount of national insurance contributions recovered by his Department as a result of those proceedings; what was the annual cost of crediting national insurance contributions to employees whose original contributions were defrauded by the employer; and what steps are being taken or may be proposed by his Department to counter such fraud by employers.
§ Mrs. Gillian Shephard
Inland Revenue is responsible for the collection and enforcement of the majority of national insurance contributions from employers. Although precise figures are not available the Inland Revenue estimates that the total amount of employers' and employees' national insurance contributions not paid over at the end of the accounts year ended 31 October 1988 was about £193 million, of which approximately £93 million relates to employees' contributions. A regional breakdown of these figures is not available and could not be obtained without disproportionate cost.308W
During 1988–89 the Department of Social Security approved the institution of civil proceedings against employers in 1,522 cases, involving about £4.2 million of national insurance contributions. Because some of these proceedings are not yet complete a final recovery figure is not available. Court action, however, usually results in recovery of 75 per cent. of the debt.
All contributions shown in an employer's annual returns to the Inland Revenue will be credited to the individual employees' records irrespective of whether the employer has remitted the contributions collected. There is, however, no record of the cost of crediting individual contributions which have been shown in employers' returns but not remitted to the Inland Revenue.
In 1988–89 in addition to inspections carried out by Inland Revenue auditors about 2,000 national insurance inspectors were employed in ensuring compliance with national insurance legislation. As part of that process they completed more than 80,000 surveys of employers' records.
Where an individual's national insurance account for any tax year does not contain sufficient contributions to maintain benefit entitlement the contributor is notified. Deficiencies in the record can also come to light when a claim for benefit is made. In all cases of this nature, irregularities are then investigated urgently and will usually reveal any failure by the employer to operate the contributions system properly. These investigative measures are kept under constant review.