NIC reform delay alarms tax experts

Cutting red tape to allow employers to pay lump-sum national insurance contributions for minor expenses could be delayed until April 1998.

Tax experts pressing for NIC contributions to be brought into line with PAYE settlement agreements welcomed last week’s announcement that the system would be reformed, but were dismayed by the prospect of the delay.

Many expected the changes to be introduced next April, a year after the new PAYE rules came into force.

Draft clauses on NICs for minor expenses, which will form part of a Bill to simplify national insurance, will be ready before Christmas. But the DSS refused to make any greater commitments.

Chairman of the Chartered Institute of Taxation’s technical committee John Whiting said: ‘The DSS did not set a date for implementation which we see as a commitment to bring it in next year.

‘But the danger is that it’s going to slip a year. Now the DSS has accepted it can be done in principle, it is surely just a question of getting on with it.’

The English ICA’s tax faculty under-secretary, Alan Coomer, was less hopeful. ‘It’s disappointing. I don’t think there is a chance of it being ready by next April,’ he said.

The IoT welcomed the Tax Law Review Committee’s report calling for modernisation of the tax system. The institute demanded a ‘one-stop shop’ approach to the appeals system, but stressed the importance of keeping general hearings for simple cases and a specialist body for more complex ones.