Day of Reckoning for Calculating Tax and NICs

Day of Reckoning for Calculating Tax and NICs

17:14 PM, 14th November 2011, About 12 years ago 3

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The Government wants to make working out how much tax to pay less taxing by modernising the system, combining National Insurance and income tax.

In a ground-breaking move, the Treasury has published two long-awaited consultation documents outlining a more straightforward tax system for workers and the self-employed.

The intention is to look at integrating PAYE and National insurance (NIC) in to a single deduction on payslips.

Ministers believe too many people find calculating tax too complicated and want to have a clearer and easier to understand process.

One paper looks at modernising the tax system, while the other looks at the best way to combine PAYE and NICs.

The Treasury is looking for employers, tax and payroll professionals to join working groups tasked with identifying and exploring options over the coming months.
Taxpayers, representative bodies, and tax professionals are also invited to give their views on:

  • What taxpayers know about the tax they pay
  • What areas of the personal tax system create the most difficulty
  • How technology can help taxpayers better access and understand their tax position
  • How ministers can find the views of individual taxpayers on how the tax system could be modernized

Exchequer Secretary David Gauke said: “For many, the tax line on their pay slip is the only time they see just how much they’re paying in tax, but the government doesn’t think that’s good enough. We want to make tax more transparent and we want people to be more engaged with their own tax affairs.

“We plan to lift the lid on tax so that people understand how much they are paying, what their overall tax rate is, and what they should be paying, in the same way that the government has lifted the lid on what they are paying for.

“We are also exploring ways in which we could integrate the operation of income tax and NICs, with benefits for employers and employees. The government will be working in partnership with external stakeholders to identify options and will report on progress at Budget 2012.

“Our vision is to transform the customer experience of the personal tax system. The documents published today set the stage for the ideas and innovations that will realise that ambition.”

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1:52 AM, 15th November 2011, About 12 years ago

About time too. NICs and Income Tax all go into the same Government pot to be squandered as they see fit anyway!


20:38 PM, 17th November 2011, About 12 years ago

So long as those of us that have paid up their 30 years of NIC don't get thrown into the same category as those that haven't.! I assume there will still be a two tier system otherwise this just looks like another excuse to milk more money at everybodies expense.

Sam Addison

9:04 AM, 27th November 2011, About 12 years ago

In theory NIC was to pay for the NHS, Pensions and the dole. Since it was not ring-fenced for these purposes it is just another tax. As an employer I now pay both to HMRC after their merger and it makes sense to me to do away with NIC and call it all tax.
Yes there will be adjustments to be made in tax allowances, e.g. for pensioners who pay no NIC, but this is no reason not to try and simplify the system and cut down on the number of civil servants funded by our taxes.

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