The Autumn Statement: Tax & National Insurance
The government will publish its Autumn Statement on 23 November 2016.
This week’s blog will see four posts on what someone might expect to see over the next four or five years by way of reforming our overly complex tax system. That doesn’t mean that you will see appropriate measures in the Autumn Statement but you may want to look out for hints that the government is thinking along these lines … or not. Any government which is serious about the simplification of our tax system during its term of office will probably need to consider whether they can realistically bring greater clarity and transparency to the four areas covered in these posts.
The second area where transparency and clarity is required lies in the interaction of income tax and national insurance contributions on earned income. While the different rates and allowances obscure the exceptionally high effective rate levied on the highest levels of earned income, now may be the time to contemplate different tax rates for different types of income and gains.
The integration of income tax and national insurance contributions would be a necessary part of this. While considerable thought would be required, it is almost self-evident that a simpler and arguably fairer system should emerge.