§ Ms CorstonTo ask the Secretary of State for Social Security what is his estimate of the value of national insurance contributions unpaid by employers(a) in total and (b) as a percentage of total contributions owed and (c) the approximate number of employees affected for the latest year for which information is available. [18913]
§ Mr. HealdSocial security regulations provide that all employees are liable to pay class 1 national insurance contributions-provided that their earnings reach or exceed a minimum amount. They further provide that it is the responsibility of employers, in the first instance, to pay both their own, secondary, and their employees' primary share of the contribution at the time earnings are paid.
Estimates of the underpayment of NICs have been made through an employer survey, conducted by the Contributions Agency, looking at the 1992–93 tax year. From the results of the survey, it is estimated that £111 million of NICs, both primary and secondary, were unpaid in 1992–93. The total amount of NICs paid by employers for 1992–93 was £35,473 million. The survey therefore indicates that the amount underpaid was 0.31 per cent. of the total amount paid.
232WThe survey also estimates that 3 per cent. of employees were affected by underpayment of primary NICs. The underpayment of secondary contributions does not affect the employee.
The survey looked at a random sample of 2,336 employees and the results are therefore subject to wide margins of error. The survey has been followed up by a survey of employer compliance levels for 1993–94 with a larger sample size. The results of this survey will be placed in the Library when available.