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National Insurance Fund

Volume 456: debated on Wednesday 7 February 2007

To ask the Secretary of State for Work and Pensions what has been the annual loss to the National Insurance Fund from the reduction of employers’ contributions on the introduction of the aggregates levy and other environmental taxes; and what the yield of each of those was taxes in each year since their introduction. (118724)

I have been asked to reply.

The landfill tax, climate change levy and aggregates levy were introduced with offsetting cuts in employers’ national insurance contributions (NICs). The information requested is shown in the following tables.

Landfill tax (LFT) revenue and value of 0.2 percentage point cut in main rate of employers’ NICs£ millionLFT revenue1 Approximate value of 0.2pp cut in main rate of employers’ NICs in 1997-9821996-973170—1997-983525501998-993236101999-00442n/a2000-01476n/a2001-02508n/a2002-03538n/a2003-04638n/a2004-05668n/a2005-06743n/a2006-0740.8 billionn/a n/a = Not available1 On accruals basis. Based on LFT declared on trader returns 2 Source: Based on HM Treasury Tax Ready Reckoner3 From October 19964 Expected

Landfill tax was introduced with an offsetting 0.2 percentage point cut in the main rate of employer NICs from 1997-98. It is not possible to calculate the effects of the compensation for the landfill tax on employer NICs after 1999 due to structural changes to employers’ NICs.

Climate change levy (CCL) revenue and value of 0.3 percentage point cut in employers’ NICs

£ million

CCL revenue1

Approximate value of 0.3 pp cut in employers’ NICs2

2001-02

771

1,035

2002-03

826

1,125

2003-04

816

1,185

2004-05

753

1,215

2005-06

738

1,275

2006-07

30.7 billion

1,350

1 On accruals basis. Based on CCL declared on trader returns

2 Source: Based on HM Treasury Tax Ready Reckoner

3 Expected

Aggregates levy (AL) revenue and value of 0.1 percentage point cut in employers’ NICs

£ million

AL revenue1

Approximate value of 0.1 pp cut in employers’ NICs2

2002-03

309

375

2003-04

340

395

2004-05

334

405

2005-06

323

425

2006-07

30.3 billion

450

1 On accruals basis. Based on AL declared on trader returns

2 Source: Based on HM Treasury Tax Ready Reckoner

3 Expected