HC Deb 11 January 1999 vol 323 cc65-6W
32. Mr. Fabian Hamilton

To ask the Secretary of State for Social Security what steps he has taken to harmonise the arrangements for tax and national insurance contributions. [63221]

Mr. Timms

The Government are committed to modernising the National Insurance contributions system so that it is simpler and easier for employers to understand and operate, and to promoting greater alignment with the tax system in the longer term.

From April 1999, the point at which employers start to pay secondary Class 1 contributions will be raised to a new "earnings threshold" set at the level of the personal tax allowance. The tax and contributions treatment of payments and benefits to employees included in PAYE settlement agreements will be aligned by the introduction of new Class 1B contributions for employers. Also from that date, under the provisions of the Social Security Contributions (Transfer of Functions, etc.) Bill the Contributions Agency will transfer from the Department of Social Security to the Inland Revenue. This will reduce the burdens on businesses and individuals by enabling tax and National Insurance contributions to be processed through one organisation.

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