Have your say on the National Insurance Contributions Bill

Have your say on the National Insurance Contributions Bill
09 September 2014

Do you have relevant expertise and experience or a special interest in the Government’s National Insurance Contributions Bill?

If so, you can submit your views in writing to the House of Commons Public Bill Committee which is going to consider this Bill.

National Insurance Contributions Bill 2014-15

Aims of the National Insurance Contributions Bill

The National Insurance Contributions Bill 2014-15 would allow for both categories of National Insurance contributions (NICs) which are payable by the self-employed – Class 2 and Class 4 – to be collected through self-assessment from April 2016. The Bill would also extend existing tax rules regarding 'accelerated payments' and 'high-risk' tax promoters to NICs, and introduce a Targeted Anti-Avoidance Rule to prevent the avoidance of NICs by 'intermediaries'.

The Bill has four elements:

- Simplifying NICs paid by the self-employed: the Bill would move the collection of Class 2 NICs into self-assessment, for the 2015/16 tax year onwards. This would mean that this category of NICs paid by the self-employed could be collected alongside Class 4 NICs and income tax from April 2016.

- Extending new rules for follower notices and accelerated payments to NICs: under Part 4 of the Finance Act 2014, HMRC may issue ‘follower notices’ when in dispute with a taxpayer over the tax benefit delivered by an avoidance scheme. Where HMRC take the view that the scheme is the same as one that has been reversed in the courts, it may notify the taxpayer and require that they make a pre-payment of the amounts of tax at stake. These monies would be held by HMRC until the taxpayer’s final liability has been determined. HMRC may also require an ‘accelerated payment’ where the taxpayer has used an avoidance scheme reported under the Disclosure of Tax Avoidance Schemes (DOTAS) regime, or a scheme that falls foul of the General Anti-Abuse Rule (GAAR). The Bill would extend HMRC powers to issue follower notices and demand accelerated payments in similar circumstances for NICs.

- Extending new rules for ‘high-risk’ promoters to NICs: under Part 5 of the Finance Act 2014, HMRC may place conditions on the conduct of individual accountancy businesses and other promoters of tax avoidance schemes. Where a promoter breaches the terms of this conduct notice, HMRC has new powers to obtain information and impose penalties. The Bill would extend this regime to NICs.

- Introducing a Targeted Anti-Avoidance Rule for intermediaries: in 2014 the Government introduced new rules to tackle tax avoidance by ‘intermediaries’ – employment businesses or agencies who liaise between workers and client companies using their services. This avoidance activity had consisted in exploiting the way tax and NI rules apply to intermediaries based offshore, and in facilitating false self-employment. Legislation with regard to income tax was included in the Finance Act 2014; equivalent provisions with regard to NICs were made in secondary legislation. The Finance Act 2014 also included a Targeted Anti-Avoidance Rule (TAAR) - legislation to ensure that further false self-employment schemes that sought to circumvent these new rules could be struck down in court. The Bill would provide for a similar TAAR for NICs.

Follow the progress of the National Insurance Contributions Bill

The National Insurance Contributions Bill 2014-15 was introduced in the House of Commons on 17 July 2014.

The second reading of the Bill took place on Monday 8 September 2014, giving MPs their first opportunity to debate the main principles of the Bill.

The Bill has now been sent to the Public Bill Committee, where detailed examination of the Bill will take place.

Guidance on submitting written evidence

Deadline for written evidence submissions

The Public Bill Committee is now able to receive written evidence. The sooner you send in your submission, the more time the Committee will have to take it into consideration.

The Committee is expected to meet for the first time on Tuesday 21 October; it will stop receiving written evidence at the end of the Committee stage on Tuesday 28 October.

Please note: When the Public Bill Committee reports, it is no longer able to receive written evidence and it could report earlier than Tuesday 28 October 2014.

What should written evidence cover?

Your submission should address matters contained within the Bill and concentrate on issues where you have a special interest or expertise, and factual information of which you would like the Committee to be aware.

It is helpful if the submission includes a brief introduction about you or your organisation. The submission should not have been previously published or circulated elsewhere.

If you have any concerns about your submission, please contact the Scrutiny Unit (details below).

How should written evidence be submitted?

Your submission should be emailed to scrutiny@parliament.uk. Please note that submissions sent to the Government department in charge of the Bill will not be treated as evidence to the Public Bill Committee.

Submissions should be in the form of a Word document. A summary should be provided. Paragraphs should be numbered, but there should be no page numbering.

Essential statistics or further details can be added as annexes, which should also be numbered. To make publication easier, please avoid the use of coloured graphs, complex diagrams or pictures.

As a guideline, submissions should not exceed 3,000 words.

Please include in the covering email the name, address, telephone number and email address of the person responsible for the submission. The submission should be dated.

What will happen to my evidence?

The written evidence will be circulated to all Committee Members to inform their consideration of the Bill.

Most submissions will also be published on the internet as soon as possible after the Committee has started sitting.

The Scrutiny Unit can help with any queries about written evidence.

Scrutiny Unit contact details

Email: scrutiny@parliament.uk
Telephone: 020 7219 8387
Fax: 020 7219 8381
Address: Ian Hook
Senior Executive Officer
Scrutiny Unit, 7 Millbank
London SW1P 3JA

Further information

Image: PA / Dominic Lipinski

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