Overview

This bill concerns changes to National Insurance contributions (NICs) for employers. Amendments were proposed in the House of Lords to exempt certain sectors (primarily in health and social care) from these changes, but the House of Commons rejected these amendments due to concerns about the impact on public revenue.

Description

The bill initially raised the amount employers pay in secondary Class 1 National Insurance contributions. The Lords proposed amendments to create exemptions for specific employers. These included those providing care homes, domiciliary support, primary care, general dental services, pharmacy services, hospice care and certain charities. They also proposed higher thresholds before contributions are due for these specific employers. The Commons rejected these amendments, stating that they would interfere with public revenue. Subsequent Lords amendments, which sought to give the Treasury the power to exempt these sectors through regulations, were also rejected on the same grounds. A further Lords amendment requesting a review of the bill's impact on various sectors was also rejected as the government deemed existing information sufficient. A revised, narrower review focusing on specific sectors, mainly charities, early years providers, hospices, pharmacies and the social care sector was also rejected.

Government Spending

The bill is expected to increase government revenue. The Lords amendments aimed to reduce this increase by exempting certain employers from the NIC increases, but the Commons blocked these proposals to protect government finances. No specific figures are provided in the bill text.

Groups Affected

The bill affects employers in general, with a potential increase in National Insurance contributions. The proposed (but rejected) amendments would have specifically affected:

• Care home providers
• Domiciliary support providers
• Primary care providers
• General dental service providers
• Pharmacy service providers
• Hospice care providers
• Charities (especially those with annual revenue under £1 million)
• Small businesses (those with fewer than 25 full-time employees)
• Early years providers
• The hospitality sector
• Providers of transport for children with special educational needs or disabilities.

These groups would have benefited from the proposed exemptions, but the Commons' rejection means they will likely face increased NICs.

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