Oh it's not a one-stop solution - there would have to be other things to be brought in. You'd need to be replacing Employer's NI with a payroll tax, which we used to have in the very dim past - known as Selective Employment Tax, which I think died around the transition from Purchase Tax to VAT. An SET would have the advantage that you could adjust it to fall less heavily on smaller employers, though that way lies abuse.
The trickiest thing to handle with the tax/NI merger is the status of pensioners. You stop paying NI when you're 65 and if you merged the two then you'd have to do something to redress the fact that they would now be paying 31% where they were previously paying 20% and increasing their tax payments by half isn't politically very good. You cure it with making changes to the pension/benefits system. Of course you could argue that the old bastards got the best out of the system and ought to be made to bear their share of the suffering but it doesn't look good in the papers if you want to be re-elected.
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Re: IR35
Date: 2010-11-08 09:33 am (UTC)The trickiest thing to handle with the tax/NI merger is the status of pensioners. You stop paying NI when you're 65 and if you merged the two then you'd have to do something to redress the fact that they would now be paying 31% where they were previously paying 20% and increasing their tax payments by half isn't politically very good. You cure it with making changes to the pension/benefits system. Of course you could argue that the old bastards got the best out of the system and ought to be made to bear their share of the suffering but it doesn't look good in the papers if you want to be re-elected.