Merging income tax and NI gets public support

MERGING income tax and national insurance would get the support of the British public, according to work carried out by PwC.

PwC convened a jury of 22 representative members of the British public to discuss taxation, which supported the idea of integrating income tax and national insurance and set out recommendations for reforming the UK tax system that will be presented to government today following discussions arranged by the Big Four firm.

The jury, which spent two days debating the purpose of tax, who should pay it and how it should be levied, also suggested that VAT should be simplified – with all essentials VAT free but 20% rate for everything else – and that inheritance tax should be scrapped in favour of new and higher bands for council tax and stamp duty land tax.

“We’ll be looking at the practicalities of the jury’s recommendations, but what’s loud and clear is the focus on simplicity and transparency,” said Kevin Nicholson, head of tax at PwC.

The jury also recommended widening the scope of so-called “sin taxes” to include unhealthy foods and setting up a new independent advisory body to reduce influence of political short-termism.

“Any move to encourage a longer term approach to the tax system is worth exploring further. The most successful tax reforms have been mapped out a long time in advance,” Nicholson said.

Related reading