§ Mr. BattleTo ask the Secretary of State for Social Security if he will estimate the effect on Treasury revenues in 1991–92 of extending(a) employers' and (b) employee national insurance contributions to all taxable benefits in kind, assuming (i) the current structure of national insurance contributions and (ii) no ceiling on employee national insurance contributions.
§ Mr. JackThe Inland Revenue estimates that the value of benefits in kind reported in the 1991–92 tax year in respect of directors and employees earning over £8,500 a year will be approximately £7.1 billion.
If employers' national insurance contributions were levied on this amount, the contribution yield would be around £750 million. Employees' contributions would amount to some £250 million if the upper earnings limit were maintained; or £650 million if the ceiling were removed. All these figures assume payment by employer and employees at the highest "not contracted out" rate of national insurance contributions—10.4 per cent. for employers and 9 per cent. for employees.
However, tax-paying employers would be able to claim corporation tax or income tax relief which would reduce income to the Consolidated Fund.
§ Mr. Chris SmithTo ask the Secretary of State for Social Security what would be the effect on Treasury revenues in 1991–92 and in a full year of abolishing the ceiling on(a) employees' national insurance contributions and (b) national insurance contributions for the self-employed.
§ Mr. JackIf the ceiling for employees and self-employed national insurance contributions were abolished, it is estimated that contribution yield would increase in 1991–92 by some £2.2 billion and £0.2 billion respectively. In a full year the increase would be £2.5 billion and £0.5 billion respectively.