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National Insurance Contributions

Volume 461: debated on Tuesday 12 June 2007

To ask the Chancellor of the Exchequer what his estimate is of the (a) level of revenue which would be foregone were national insurance contributions classes 1 and 4 to be abolished and (b) level to which the basic rate of income tax would need to be raised to recoup such revenue. (141945)

The estimate of the total amount of class 1 (employee and employer) and class 4 (self-employed) NICs revenue that would be foregone is £95 billion for 2007-08. Individuals would have to pay basic rate income tax of 33 per cent. for 2007-08 to recoup the £40 billion of employee and self-employed NICs foregone. This estimate does not allow for any behavioural effects.