TaxPersonal TaxBCC advocates end to national insurance

BCC advocates end to national insurance

National insurance should be scrapped and combined with the PAYE system, according to the British Chamber of Commerce.

b>Link: Pressure groups demand NI overhaul

The NI system, introduced in 1946 as a contributory welfare fund, adds ‘enormously’ to an already complex tax system, yet is merely another tax, the body has claimed.

David Frost, director general of the BCC, said: ‘Business is being held back by administrative costs and burdens. If we are to compete globally and pay for the chancellor’s ambitious public spending commitments we must have simplification of the tax and regulatory system.

‘Merging employee NI and income tax would be a very positive start. Tax simplification is just the windfall saving the chancellor needs and British businesses will thank him for it.’

The BCC is demanding a three-stage approach to eventually ‘amalgamate employee’s NI contributions into income tax’. The first would put NI on the same earnings base as PAYE and calculate it on an annual basis. Next, the chamber wants to simplify the NI tables, by removing unnecessary bands and exemptions. Lastly, the body seeks to merge employees’ contributions into income tax.

Employers have long complained about the cost of managing NI contributions.

However, merging it with income tax would carry political risks for the government. Income tax rates would go through a steep rise, an outcome Gordon Brown has pledged to avoid. The government would also have to admit that contributions do not go to social services and health, contrary to public perception.

Related Articles

HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

1w Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2w Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

2m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

4m Emma Smith, Managing Editor
Rangers tax case to have ‘dramatic’ consequences for football and business

Legal Rangers tax case to have ‘dramatic’ consequences for football and business

4m Emma Smith, Managing Editor
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

3m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

3m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

3m Alia Shoaib, Reporter