To ask the Chancellor of the Exchequer if he will make a statement on failures by the Contributions Agency to collect and credit national insurance contributions in 2004-05; and what action is being taken (a) to avoid the issue of incorrect notices of deficient contributions and (b) to restore contribution records to individuals affected by such failures. (82928)

There have been well publicised delays in processing 2004-05 Employer’s Annual Returns. HM Revenue and Customs has now processed all error free returns.

HMRC has posted 99 per cent. of the 42.7 million relevant individual national insurance records for employment to its National Insurance Recording System (NIRS) by June 2006. The number of records yet to be processed is in line with what HMRC would normally expect to have at this point in the year.

HMRC is working hard to get the remaining data through to NIRS prior to the commencement of the Deficiency Notice (DN) exercise which is planned for September. It is anticipated that there will not be any increase in the amount of DNs issued than in any other normal year.