Tax transparency ‘long overdue’

The Chartered Institute of Payroll Professionals( CIPP) was responding to press reports that national insurance will be renamed the ‘earnings tax’.

Backbench Tory MP Ben Gummer will introduce his National Insurance (Renaming) Bill in the Commons tomorrow.

While it stands no chance of becoming law, it is thought Chancellor George Osborne will introduce a similar measure in the Budget next month.

It is believed this is the first step to merge the income tax and national insurance systems.

The CIPPsaid it welcomes the government’s transparency around the tax system believing it to be “long overdue”.

Karen Thomson, ( CIPPAssociate Director of Policy, Research, and Strategic Visibility) said: “The CIPPdoes in principle support a change of name if it is the government’s intention, with cross party agreement, to look at merging the two systems,”

“Changing the name just to prove transparency will put payroll software and other professions (training etc.) within the payroll industry to unnecessary administrative and potentially cost burdens if this isn’t their intention.

“The CIPPlooks forward to the formal announcement from the government and to the consultation from HMRC and/or HMT, along with confirmation of when this change is likely to happen.

“There will be a number of areas to consider in addition to the employee and employer Class 1 National Insurance changes, such as Class 1A and 1B. Any associated legislation will also need to be amended.”

The CIPPsaid it expects its policy and research team to be involved in any future consultation.