Osborne urged to act on tax and NICs
paulschapman
Posts: 35,536 Forum Member
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http://www.accountingweb.co.uk/article/osborne-tax-and-nics/568726
As something muted by the OTS after the election it is about time we had some positive movement on this. And clarity on employment status might also lead to a decline in ZHC being used to ensure flexibility in staffing.
A group representing self-employed taxpayers has called for a full merger of income tax and national insurance contributions and suggested the creation of a new “freelancer limited company” structure as an interim measure, while Menzies tax partner Simon Massey has called on the government to “get off the fence” and consult on an alignment of income tax and NICs.
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In the meantime, a “freelancer limited company” structure would deliver “clarity of employment status” for independent professionals. “It would be a specific, opt-in structure, open only to independent professionals, not large companies, which would exempt them from IR35 and treat them as a business.”
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Massey said the “real reason” for the delay appeared to be political. “No government wants to draw attention to the true marginal rate of tax that UK employees pay. For example, an employee on the UK average wage of £25,000 loses about a fifth of their income in tax and NIC.”
As something muted by the OTS after the election it is about time we had some positive movement on this. And clarity on employment status might also lead to a decline in ZHC being used to ensure flexibility in staffing.
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Comments
They could have a lower tax rate for pension income, which isn't subject to NI.
Well according to the statement I received from HMRC recently the government took 26% of my earnings last year
I agree, both of which should be set at the minimum wage level.