It’s a measure of how long this blog has been in existence, that for the second time in successive days I can refer to posts from several years ago.
Today’s look at the past has been triggered by a new round of rumours that The Chancellor of the Exchequer, George Osborne, is once again considering the possibility of merging Income Tax and National Insurance.
Or is he?
I’m not convinced, and equally Downing Street seems to be damping down speculation as well. Yet if it happens (a seriously big ‘if’) it would have a massive impact on the world of employee benefit provision, with both pensions and flexible benefits facing some major changes and challenges.
My general thoughts on this subject have not changed hugely in the last 3 years. And for those wanting a more in-depth view I would refer you to this post from 2011: My 2011 Post on Income Tax & NI merger
And my more topical reaction re this week’s recurring rumours is covered in this article from Workplace Savings & Benefits magazine published yesterday: WSB IT and NI Merger
Any project of this magnitude would take years of planning, years to make happen, and would be subject to many legislative tweaks to manage the inevitable winners and losers that taxation change always generates. Yet, despite being initially announced in 2011, there is little public evidence that much progress has been made here. So I would question whether even a returning Conservative Government, with a significant majority, would have the time or appetite to make this happen in the next parliamentary term.
It will be interesting to see if this appears in either the Conservative Manifesto or Autumn Budget Statement, and if so what emphasis and time-frame is put on the promise. In the meantime, there is plenty of actual (rather than rumoured) change in the employee benefit space for employers to focus on.
Best regards
Steve
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