NIC and Income Tax Merge
Any employer will tell you the frustrations caused by having to administer PAYE and NI (National Insurance) deductions. This is complicated by the fact that two sets of legislation have to be complied with and this legislation has evolved from different government departments. However, it looks as if all that is set to change - the Chancellor announced in his last Budget that NI and income tax will be merged.
It is clear from the consultation and research done so far that there will be administrative savings for employers. The Government is now due to launch a formal consultation process beginning in autumn 2011, which will collate responses from employers and tax professionals to a 14 point questionnaire.
Justine Riccomini, Senior Employment Tax Manager at Chiene + Tait says “the changes will probably not be happening for many years because the Government has to ensure there are not any unintended consequences of the merger and it is wise to thoroughly investigate any new regime, rather than rush into it.”
Justine will be responding to the consultation document when it arrives. If employers wish to engage in the autumn consultation process via Chiene + Tait, they should contact Justine directly on justine.riccomini@chiene.co.uk who will collate and table any responses.
For more information about the consultation, please visit the HMRC website here.