How to go about integrating income tax and NI

Many businesses regard the management of tax issues as a major commitment of their administrative resources. To help ease the burden, the Government is looking at possible ways of merging the two tax systems – income tax and national insurance  –with which employers must work. To that end, it has asked for the thoughts of businesses on the matter.

The Treasury has insisted that the ‘call for evidence’ is just a first step. Responses to the ideas that are gathered will inform the Government’s proposals for reform, on which it will consult in the autumn.

At the moment, the income tax and national insurance systems work separately from each other, but the Government believes that greater integration of the two has the potential to reduce business admin. The ‘call for evidence’ document asks 14 questions, the majority of which focuses on the burdens employers face in managing income tax and NIC payments through the Pay As You Earn system. For example, how much staff time and other resources are required, which aspects of the process currently work well and how often problems are encountered when calculating payments.

We appreciate that operating a payroll can be onerous for some smaller firms. You can, of course, save valuable business time by outsourcing some of your admin work. We’d be more than happy to talk to you about how we could help.