Alignment of Income Tax and National Insurance

Published on 6 January 2016

LITRG has responded to the consultation by the Office of Tax Simplification on the alignment of income tax and National Insurance by supporting a move to closer alignment as long as this leads to some simplifications which promote a better understanding of the Pay As You Earn and NIC regimes, particularly amongst unrepresented taxpayers.

Several key areas where we believe there is scope for improving the system through greater alignment include the basis for calculating NIC, the basis on which liability to both income tax and NIC arises for employees on employment income, and greater parity between self employed and employee NIC, but any changes must be fair to all.

However the impact of any changes to the NIC regime on the benefits system must be fully considered and understood and protective measures introduced if necessary.

The LITRG submission can be found PDF icon here.

(04-01-2016)

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