§ Mr. Hague
If the upper earnings limit for national insurance contributions were removed, the effect on marginal tax rates would be as follows:
Marginal tas rate including national insurance Annual income With an upper earnings limit per cent. Without an upper earnings limit per cent. £3,445—£5,945 29 29 £5,946—£21,840 34 34 £21,841—£27,145 25 34 £27,146—£27,145 40 49
1. Assumes single person's tax allowance of £3,445.
2. Assumes that earnings for N1 purposes are spread evenly 748W throughout the year.
3. Annual upper earnings limit for the payment of NI contributions is £21,840.
Removal of the limit would increase national insurance contribution yield by £2.7 billion in a full year.