17 November 2016
The Office for Tax Simplification (OTS) has just published their second report on the possibility of aligning National Insurance Contributions (NIC) and Income Tax (IT).
This subject has been plodding along for quite some time now and a quick fix does not appear likely. The problem that arises is that whichever way the Government proceed with aligning the systems, we will see both winners and losers. Additionally, at the moment, the suggestion to run an NIC system along the same lines as how PAYE runs for Income Tax purposes will see the following analysis:
- 40% of the working population could feel the effects of any changes;
- gainers would generally be part time workers, statistically likely to be women and those under 35 years of age; and
- losers would typically be paid more than £20,000 annually and are generally in multi-employments, or at the higher income levels, in industries with bonuses.
The forthcoming Autumn Statement may be the opportunity for the new Chancellor to start along the lines of simplification in this field, but personally I think this will fall to the back burner, again to be looked at in the future.
We will be passing comment on the Chancellors Autumn Statement on the 23November, so please watch this space and follow our live commentary via our corporate Twitter feed at @UHYHackerYoung. If you would like any further information on this blog please feel free to contact myself or your local UHY tax expert.
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