National Insurance Contributions (Hansard, 27 November 1981)

§ Mr. Grylls
asked the Secretary of State for Social Services what national insurance contributions under classes 1, 2 and 4 will be borne by a self-employed person who earns £50,000 per annum in professional practice, included in the profits of which and assessed by the Inland Revenue under schedule D case II, are fees as a non-executive director of three other companies of £8,000, £7,000 and £6,000, respectively.

§ Mrs. Chalker
As a director, a person in this position would pay class 1 contributions of £806 for 1981–82, assuming that he had deferred his liability to pay contributions in one of his employments. He would have no class 2 or class 4 liability.

§ Mr. Grylls
asked the Secretary of State for Social Services which national insurance contributions under classes 1, 2 and 4 will be borne by each of the individuals and employers in each of the following examples: (a) an employee employed full-time by one company at a salary of £50,000 per annum, (b) an employee employed mainly by a company at a salary of £30,000 per annum and as a non-executive director by two other companies not associated in any way with the first company at fees in each case of £10,000 per annum and (c) an employee employed full-time by a company at a salary of £50,000 per annum and as a non-executive director by another company at fees of £10,000 per annum for which he accounts in full to the first company.

§ Mrs. Chalker
The figures for the 1981–82 tax year will be as follows:
513W

(a) (b) (c)

Salary £50,000 (i) £30,000 (ii) £10,000 (iii) £10,000 (i) £50,000 (ii) £10,000

Class 1 contributions (not-contracted out) Employee £806 £806 ^*— ^*— £806 ^*—

Employer £1,424.80 £1,424.80 £1,370 £1,370 £1,424.80 £1,370

No Class 2 or Class 4 contributions will be payable.

^* Assumes that the contributor will have deferred his liability to pay contributions, in the knowledge that he will be paying the maximum contributions required in his first employment.

§ Mr. Grylls
asked the Secretary of State for Social Services whether class 1 national insurance contributions are calculated as far as is practicable on the insurance principle to meet the cost of the benefits to which the individual is, or may become, entitled; or whether their level is set by reference to a desired level of revenue, as in the case of taxation.

§ Mrs. Chalker
The national insurance elements in the contributions are set at rates calculated after taking Treasury supplement, interest, administration, and so on, into account, to provide a rough balance between the income and outgo of the national insurance fund.

		(a)	(b)	(c)
Salary		£50,000	(i) £30,000	(ii) £10,000	(iii) £10,000	(i) £50,000	(ii) £10,000
Class 1 contributions (not-contracted out)	Employee	£806	£806	^*—	^*—	£806	^*—
	Employer	£1,424.80	£1,424.80	£1,370	£1,370	£1,424.80	£1,370
No Class 2 or Class 4 contributions will be payable.
^* Assumes that the contributor will have deferred his liability to pay contributions, in the knowledge that he will be paying the maximum contributions required in his first employment.