Political Discussions


At least twice a year members of The Tandridge Club meet to discuss a a wide range of topics. Following the discussion a paper is produced and sent to our MP so that he can take our recommendations forward to the relevant Government Department. You can read a summary of the Merging Tax & NI paper below. For a full copy please Contact Us.


Policy Area: UNIFICATION OF INCOME TAX & NATIONAL INSURANCE                                                 Date of Discussion: 13.05.11

 

Introduction/Background:

 The discussion addressed two questions 1) is the unification possible and 2) If so, what would the new system look like; if not how can the system be simplified.

 Discussion Conclusions:


  1. The benefit system needs to be separated from revenue raising
  2. Politicians like to have 2 systems as it is easier to hide unpopular changes and few others seem in favour of unification
  3. Radical change can only be made by designing a new system from scratch as the discussion concluded that merging the present systems is not possible
  4. The present complexity results from new rules being introduced without old ones being repealed. Time now to concentrate on simplification
  5. End state pension link to earnings (SERPS/S2P) preserving existing entitlements. Make personal pension provision compulsory.
  6. Align Income Tax and NI definition of earnings, start and stop points and use an annual earnings period for both systems.
  7. Abolish the married woman’s reduced rate option and the mariner’s reduction as few people affected thus halving the number of NI tables from 20 to 10.


Notes:


The present NI system is so complex that employers are usually forced to use an external bureau and/or a tax advisor thus adding to payroll costs. The payback from simplification of NI would almost certainly be more financially significant, more widespread and more appreciated than simplification of Income Tax.