National Insurance Contributions: Tax Allowances

(asked on 21st February 2018) - View Source

Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, how many people received relief from national insurance contributions under the lower profits limit in (a) 2015-16, (b) 2016-17 and (c) 2017-18.


Answered by
Mel Stride Portrait
Mel Stride
Secretary of State for Work and Pensions
This question was answered on 26th February 2018

In response to points one and three, the table below shows estimates for the number of people receiving income tax or National Insurance Contributions relief for each of the requested allowances. The estimates show people that would face a higher tax liability if the individual allowances and/or thresholds were removed, (and include people who are currently non-taxpayers as their income is covered by these thresholds and/or allowances).

Estimates of the number of people who received NIC relief (Millions) (1)

2015-16

2016-17

2017-18

Contracted out rebate occupational schemes

6.2

-

-

Lower profits limit (LPL)

3.6

3.7

3.7

(1) The figures are rounded to the nearest hundred thousand and presented in millions.

Information can only be provided for contracted out rebate occupational schemes for 2015-16, as contracting out was abolished in 2016-17.

Estimates are based on the 2014-15 Survey of Personal Incomes (SPI), projected to 2015-16, 2016-17 and 2017-18 using economic assumptions consistent with the Office for Budget Responsibility’s November 2017 Economic and Fiscal Outlook.

In response to point two, the Secondary Threshold is the point at which Class 1 Secondary NICs is charged (at 13.8%) to employers for each of their employees. The benefit of the relief is for the employer on each of their employees in the form of a reduced Class 1 Secondary NICs liability. The employee does not benefit directly from this relief and so it is not possible to provide estimates for the number of people who received NIC relief due to the Secondary Threshold.

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