Clause 16 - Repeal of certain redundant reliefs relating to Class 4 contributions

National Insurance Contributions Bill – in a Public Bill Committee at 3:15 pm on 21 November 2013.

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Question proposed, That the clause stand part of the Bill.

Photo of David Gauke David Gauke The Exchequer Secretary

There is not a lot to say on this clause. I could, of course, say a lot, but I am not inclined to.

Clause 16 will repeal two redundant class 4 national insurance contributions reliefs. As I am on my feet, I am sure the Committee will be keen to know what they are.

The first is the repeal of paragraph 3(3) of schedule 2 to the Social Security Contributions and Benefits Act 1992 and its Northern Ireland equivalent. It is an obsolete provision that dates from the introduction of independent  taxation of spouses from 1990-91. Changes were made for 1990-91 onwards, so that only the losses of the self-employed person, and not their spouse, could be deducted for the purposes of calculating profits on which class 4 NICs are payable.

Paragraph 3(3) of schedule 2 to the 1992 Acts provides that any losses incurred under the previous rules could be carried forward and used against the class 4 NICs liability. The relief was a transitional provision, which the Office of Tax Simplification, in its review of reliefs, identified as no longer necessary and should be repealed.

The second repeal is that of paragraph 9 of schedule 2 to the 1992 Acts. This is another obsolete relief that provides that where a husband or wife has elected to be assessed separately for income tax purposes or a husband and wife have jointly elected that the wife’s earned income should be taxed as though she was a single person, the election is to operate for class 4 NICs purposes only. The effect was that wives would be assessed on their own class 4 income and would pay an appropriate contribution. Where an application has not been made for separate assessment or an election for the separate taxation of a wife’s earnings, the husband will be liable to pay any class 4 contributions due in respect of his wife’s income. The aggregation of income, which treated the income of a woman living with her husband as his income for income tax purposes, was abolished with effect from the tax year 1990-91 onwards, so the relief is redundant and is to be repealed.

Question put and agreed to.

Clause 16 accordingly ordered to stand part of the Bill.

Clauses17 to 20 ordered to stand part of the Bill.

Question proposed, That the Chair do report the Bill to the House.

Photo of David Gauke David Gauke The Exchequer Secretary

May I take this opportunity, given that we have rapidly come to the end of scrutiny in Committee, to thank one or two people? I thank all hon. Members for their contributions over the day. I am used to making such a speech at the end of consideration in Committee of the Finance Bill, which tends to begin in April and proceed through May, with a break, and then into June. If we are unfortunate, it may well conclude in July, so to complete consideration in Committee in a single day is a novel experience, but not unwelcome.

Given that matters have not been contentious, I thank the hon. Member for Birmingham, Ladywood for her appropriate and well-judged scrutiny. I do not need to warn her that it is not always quite like this. The Finance Bill Committee, which she will no doubt experience next summer, is much more of a slog. I am none the less grateful for her questions and interventions.

I thank the Whips—my hon. Friend the Member for Hastings and Rye on the Government side—for keeping everything in order, and my hon. Friend the Member for Macclesfield, who stood in as Parliamentary Private Secretary.

I thank you, Mr Streeter, for your calm chairing of proceedings. I do not believe that this has been one of the more difficult Committees to chair. I also thank Sir Alan for chairing the evidence sessions on Tuesday and the witnesses who gave evidence. I thank the Hansard writers and the Clerks. I thank the police for controlling the hordes of members of the public wanting to view proceedings, and the officials for the support that they have provided me.

The Bill is useful and will help to put in place an environment that is friendly for smaller businesses and good for increasing employment and wages. It also includes important measures regarding tax avoidance. It has been a great pleasure to consider the Bill, and a particular pleasure to have considered it so quickly. I look forward to consideration on Report, when we might be able to progress at a similar rate of knots.

Photo of Shabana Mahmood Shabana Mahmood Shadow Minister (Treasury)

I am grateful to the Minister for his comments and echo almost all his remarks. I have to say that it is somewhat disconcerting to start my career in the shadow Treasury team agreeing with quite so much of what he has to say. I look forward to being thoroughly disabused of that position soon.

In my first outing against the Minister, we considered a piece of delegated legislation that involved a huge amount from my previous role as shadow spokesperson on universities and science. He said, “It’s not always like this,” but he is having to say that to me again. I look forward to taking a different approach when we consider the Finance Bill.

I thank you, Mr Streeter, for your chairmanship of the Committee, and your help in guiding me through the procedure. I also want to put on record my thanks to Sir Alan for his chairmanship of the evidence sessions. I echo the Minister’s thanks to Hansard, the Clerks, police, officials, the Whips on both sides of the Committee and all Members who contributed to scrutinising the Bill. See it as an early Christmas present from me to everyone that we have finished so early.

I hope that the Minister will reciprocate. I remind him that I am a Muslim and our equivalent to Christmas is Eid, which is celebrated twice a year, so I hope he will be doubly generous at some appropriate moment and keep things to good time.

Question put and agreed to.

Bill accordingly to be reported, without amendment.

Committee rose.

Written evidence reported to the House

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