Kirsten Oswald – 2016 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Kirsten Oswald on 2016-06-08.

To ask Mr Chancellor of the Exchequer, what estimate his Department has made of the distributional effect of the exclusion from National Insurance contributions of property, dividends, pensions and other forms of non-employment income.

Mr David Gauke

National Insurance contributions (NICs) are not intended to tax all forms of income. As a system of social security, the purpose of NICs is that individuals contribute when they are working, in order to build entitlement to contributory benefits such as the State Pension.

Taxes are levied on non-employment income through the rest of the tax system, and the government’s policies since 2010 have repeatedly increased the contribution of the wealthy. The richest fifth of households will contribute more than half (52%) of UK household tax receipts in 2019-20; under the 2010-11 tax system, they would have paid 49%.