Unfair NI system

Paul_Herring

Clifford_Pope wrote: »

So why do we still have it ?

Because it's a tax. And governments are generally reluctant to reduce individual taxes to zero.

Merging it into income tax brings its own set of special problems (disparity between what it's applied to, and at what ages for example; the realisation by the general population - who can't add two percentages together - when they realise exactly what proportion of their wages are being sequestered for another. )

badmemory

Of course at the moment paying NI entitles you to different things from tax. Merging them would mean that some people would be entitled to more things than they are now, which wouldn't go down well in some circles.


Can you imagine the outcry when basic tax is put up to 32% & the threshhold lowered from 11850 & when the next rate only goes up to 42%. It may not make any difference to how much it costs the individual, it would be the perception. The tories won't do it because they are afraid of losing the retired/self employed/living on taxable savings vote who will be the ones paying significantly more for absolutely no benefit, because they are unlikely to actually be entitled to any of those benefits due to age and/or income.


Of course we could land up giving higher personal allowances to the over state pension age persons. Why would it not be a good idea to go back to making things even more complicated?


In the last 8 years ordinary peoples tax affairs just seem to have got more complicated, at the same time as HMRC are absolving themselves of all responsibility to even attempt to notify us properly of those responsibilities. Child benefit claw back for one!

Paul_Herring

Can you imagine the outcry when basic tax is put up to 32%

Of course, we've both forgotten employers NI here. That 32% should be 40%* (with a commensurate ~13.8% increase in wages when employers no longer have to pay their bit. LOL)

Of course we could land up giving higher personal allowances to the over state pension age persons.

We used to. Osborne got rid of it 5 years ago (the introduction of what was termed the 'granny tax' https://www.bbc.co.uk/news/business-17472829)

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* £20+£12 on £100 is 32%
£20+£12+£13.8 on £113.880 is 40.35%