THE ELEPHANT IN the room of tax simplification is trumpeting. The merger of National Insurance and income tax seems to be a possibility, according to the nationals.
But, in fact, chancellor George Osborne all but ruled out a full integration of the systems yesterday. Indeed, his limited scope even caused John Whiting to express his disappointment.
Crucially, Osborne said that he is “not proposing we extend National Insurance to pensioners, or to other forms of income, or that we abolish the contributory principle”. It is this final point that is the most salient. A full merger will have to include an abolition of the contributory principle, otherwise it remains National Insurance.
What Osborne has done is paved the way for an alignment of the systems – the same calculations, the same review period, maybe even a removing all the differences between reliefs applied to the systems. All these would be positive moves and would simplify the systems.
But the fundamental principle behind National Insurance – the contributory principle – will remain. And, as such, the possibility of complete transparency around our rate of tax will not happen.
Making Tax Digital will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs
MHA MacIntyre Hudson has partnered with cloud accounting software provider Xero ahead of the government’s requirement for digital records
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
Does Darwin's theory apply to taxation? Colin ponders...