Think tank's tax shake-up gets cool reception
Profession highlights flaws in the Institute for Fiscal Studies sweeping tax reform paper
A THINK TANK has called for aN overhaul of the UK’s tax system which goes as far as income tax being merged with national insurance deductions.
The Institute for Fiscal Studies (IFS) proposed the radical move only days after the government’s tax simplification panel announced progress with its own work.
However the UK200Group of accountants have highlighted flaws in the IFS proposals, both in fiscal and political terms.
Alan Boby, partner at Ellacotts said: “At a glance it seems logical to align and combine all of these under one tax but it is not that simple.
“We currently have a state pension system that relies upon individual’s records of national insurance contributions over a period of 30 years or more.
“How could we have a fair state pension system without, at least to some extent, matching what people get out from what they put in.”
Integrating income tax and NICs would make the starter rate of the combined levy in the UK 31%, advisers warned.
Cormac Marum, partner at Harwood Hutton said:
“It would be a brave politician who proposed an 11% hike in the standard rate of tax.”
