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Merge PAYE and NI into single simple tax

1 Comment 2nd July 2010

PAYE is a tax with one set of rules. NI is effectively a tax with a different set of rules.

Both are complex. A single tax with a simple set of rules that can be understood by those that are taxed, those that have to collect the the tax (the employers)  and the HMRC staff.

Why does this matter?

Reduces overhead on SMEs. It is bad enough having to collect and pay the money. But the complexity of the existing system is unbelievable. even HMRC seem to be unable to understand it.

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One Response to Merge PAYE and NI into single simple tax

  1. Brian Carter says:

    Whilst it would at last be honest to treat NI as tax and not some magical funding of the pensions, benefits, etc, I dont think that it would make much difference to SMEs as their payroll software deals with it anyway. The biggest issue is what rate would be forced on the millions of people over state pension age still working and now exempt from NI contributions. There would have to be a two tier tax rate to take this into account.

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