THE TREASURY HAS further limited the scope of the consultation on a possible merger of National Insurance and income tax, Accountancy Age can reveal.
A Treasury official told delegates at an Institute for Fiscal Studies and Office of Tax Simplification conference this morning that the review into a possible merger of income tax and NI would be on the operational aspects of the systems only. The system for employers’ NI contributions would remain unchanged, the official confirmed.
Chancellor George Osborne announced in the Budget that the government will consult on the simplification of the systems. However, he ruled out a complete merger and said that the contributory principle of NI would remain unchanged.
The OTS recommended about a merger of the systems. Its tax director, John Whiting, told Accountancy Age that he was “disappointed” with the lack of a review into the NI contributory principle.
A Treasury spokeswoman said: “While employer NICs will remain a separate charge, the consultation on integrating the operation of income tax and NICs will examine the potential for reform to reduce the administrative burdens associated with it.”
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