The measure has been mooted by the political party in its Fairer Taxes policy paper, which sets out its plans to ensure everyone would pay their ‘fair share’ of tax under its leadership.

In a statement, the Coalition partner said: ‘Class 1 employee NICs are currently only payable on earned income (broadly cash and cash-equivalents). Unlike income tax, they are not currently levied on many benefits- in-kind, such as company cars or private medical insurance. These benefits however are often taken in lieu of salary (under ‘salary sacrifice schemes’) and include many goods and services which other employees, without access to such schemes, must purchase out of their post-tax (and post-NICs) income.

‘We believe that these benefits, which are effectively a form of income, would in a fair system be taxed in the same way as income, and therefore propose that Class 1 employee NICs should be applied to benefits in kind. Employers already pay Class 1A employer NICs on these amounts, so this change would not create any additional administrative complexity, as the information required will already be contained within employers’ payroll systems.’