Select Committee on Social Security Minutes of Evidence


Table showing National Insurance Lower and Upper Earnings Limits compared with personal tax allowance and average earnings from 1979
Income tax personal allowance Income tax single personal allowance+ NIC LELNIC UEL Average earnings of all full time employees@
1979-801,165 19.5013598.00
1980-811,375 23.00165118.00
1981-821,375 27.00200130.70
1982-831,565 29.50220140.70
1983-841,785 32.50235152.70
1984-852,005 34.00250165.20
1985-862,205 35.50265177.90
1986-872,335 38.00285191.80
1987-882,425 39.00295208.70
1988-892,605 41.00305229.10
1989-902,785 43.00325251.40
1990-913,005 46.00350273.90
1991-923,295 52.00390294.70
1992-933,445 54.00405310.80
1993-943,445 56.00420321.30
1994-953,445 57.00430331.00
1995-963,525 58.00440343.90
1996-973,765 61.00455359.60
1997-984,045 62.00465377.58
1998-994,195 64.00485
1999-004,335 66.00500

+ Independent Taxation introduced in 1990-91.
@ Mean average earnings figures based on the New Earnings Survey averaging the figures for the two Aprils.
(Figures calculated by assuming 52 week in each year)

May 1999

Letter to the Clerk of the Committee from the Department of Social Security (CP 24A)


  Thank you for your letter of 26 May, addressed to Marianne. I am pleased that you think the Committee will find the memorandum helpful.

  You asked if we could provide an expanded version of the table at Annex D showing the comparisons of tax allowances, National Insurance contributions limits and annual average earnings. I attach a copy of this for the Committee. I should however stress that the figures are only for illustrative purposes, this is because personal taxation in PAYE is deducted on a cumulative basis, the deduction in each pay period takes account of earnings and allowances that have accrued from the start of the year. In contrast National Insurance contributions are due and paid on the basis of earnings in each pay period (usually a week or a month).

Lavinia O'Brien
Department of Social Security

17 June 1999

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Prepared 13 December 1999