National Insurance Contributions Bill

The National Insurance Contributions Bill is a government bill that would introduce new measures around national insurance contributions. The bill would:

• introduce national insurance relief for employers based within a freeport tax site;
• introduce national insurance relief for employers of ex-service personnel for 12 months after their start date;
• create a national insurance exemption for those receiving payments under the Covid-19 test and trace support payments scheme; and
• create anti-tax avoidance provisions to allow national insurance avoidance schemes to be brought into the disclosure of tax avoidance schemes (DOTAS) system.

The bill is separate from the recent 1.25 percentage point increase in national insurance contributions to fund the new health and social care levy announced by the Government on 7 September 2021. This will be covered in a separate Lords Library briefing on the Health and Social Care Levy Bill. 

The National Insurance Contributions Bill completed its House of Commons stages on 6 September 2021. One minor drafting amendment from the Government was made during its Commons stages. The bill received broad support in the House of Commons. However, some MPs raised concerns around the details of the freeport provisions within the bill, whether the national insurance relief for employers of ex-service personnel should last for longer than 12 months, and whether the existing employment allowance relief scheme aimed at small and medium-sized businesses should be extended.

The Government has said this bill would support regional growth, while also protecting those on low incomes from the financial impacts of Covid-19. It also argues that the bill would strengthen the Government’s powers to tackle promoters of tax avoidance schemes.

The bill received its first reading in the House of Lords on 7 September 2021. At the time of writing no date for second reading of the bill has been announced.