 Osborne should ditch NIC or create an Office for Tax Complication
14 March 2011: PKF Accountants & business advisers are urging the Chancellor to listen to the Office of Tax Simplification and announce in the Budget that he will combine income tax and national insurance contributions (NIC) by the end of his Government’s first term.
The OTS’s recent “Small business tax review” suggested that combining the taxes would create administrative savings all round and be of particular benefit to small business.
Philip Fisher, head of employment tax and rewards at PKF, comments: “NIC is a stealth tax that long ago ceased to have any real connection to the benefits that it once paid for. Combining income tax and NIC may be very courageous but would be a fine way for Mr Osborne to be remembered by posterity. “
The OTS has suggested gradually aligning the two sets of rules to smooth the transition to one basic tax. The Government is already considering some changes that should help in the alignment process. Introducing a single tax credit and a flat rate pension will further loosen the ties between state benefits and NIC.
Philip Fisher concludes “George Osborne’s Budget announcements on this issue will set the tone for his Chancellorship. If he doesn’t take his own quango’s advice, he might as well ditch the OTS and create an Office for Tax Complication instead.”
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For further information, please contact:
Philip Fisher, on 0207 065 0300, philip.fisher@uk.pkf.com or
Graham Yeatman, on 020 7065 0409, graham.yeatman@uk.pkf.com
Notes to Editors:
1. PKF (UK) LLP is a leading firm of accountants and business advisers with more than 1,500 partners and staff operating in 23 offices in the UK mainland firm, incorporating a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk
2. PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Guernsey) Limited is incorporated in Guernsey.
3. PKF (UK) LLP is a member firm of the PKF International Limited network of legally independent firms. The PKF International Limited network has around 17,600 people operating in 120 countries around the world.
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