Income Tax Reshuffle Con

Income Tax Reshuffle Con.

The plan for National Insurance Contributions and Income Tax to merge would reduce employer administration costs according to a survey of directors by the Institute of Directors.

In addition, the survey suggests that wages would rise and more jobs would be created.

Our view
This move is a con on the people.  The second tier State Pension, formerly SERPs, has already disappeared yet we are still paying the same level of National Insurance.

The National Insurance arm of HMRC and the Pensions Agency would certainly lose jobs and both employees and employers already have the ‘sword of Damocles’ looming in that Auto-Enrolment in pensions is already here and will start to force smaller employers to pay into employee pensions in the coming years.

In short, we will pay more in combined tax and national insurance, plus more in compulsory pensions, believe us it will eventually become compulsory.  Meanwhile, we will get less in State Pensions as we lose the Second State Pension.

Finally, think of the complexity in that Europe still has social security contributions.  How will this work when we are employed in other countries or non-domiciles work in the UK and then go back home? The transfer of benefits between the UK and Europe could become extremely complex and the only people that will lose out are the people.

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