§ Mr. Malcolm BruceTo ask the Secretary of State for Social Security what estimate he has made of uncollected national insurance contributions for(a) 1991–92, (b) 1994–95 and (c) 1995–96; and if he will make a statement. [3386]
§ Mr. Healdall employees whose earnings reach or exceed a minimum level are liable to pay class 1 national insurance contributions. It is the responsibility of the employer, in the first instance, to pay both their own (secondary) and their employee's (primary) share of the contribution at the time earnings are paid.
Estimates of the underpayment of class 1 NICs have been made through two employer compliance surveys; however these covered only the years 1992–93, 1993–94 and 1995–96. The survey in respect of the 1995–96 tax year provided an estimate that £92.8 million NICs (primary and secondary) were not paid. This figure represents 0.21 per cent. of the total amount paid by way of NICs in 1995–96.
The Contributions Agency commissioned the first survey in 1994 and following analysis and review of the results a further survey was carried out in respect of the performance in the 1995–96 tax year.
Self-employed contributors pay class 2 and class 4 contributions. Class 2 contributions are paid by direct debit payments or in response to the issue of quarterly bills. Estimates as to unpaid class 2 contributions could be obtained only at a disproportionate cost.
Class 4 contributions are collected by the Inland Revenue, which draws up its accounts on the last Friday in October. The figures for the year ended 1996 are not available, the figures for the years ended 1992 and 1995 the amounts of class 4 contributions uncollected and written off were:
- 1992: £61.9 million
- 1995: £34.5 million
Figures for class 4 contributions are for England, Wales and Scotland only.