Downloads
wp2107.pdf
PDF | 486.19 KB
Income Tax and National Insurance are now sufficiently similar that merging them appears to be a plausible option, yet still sufficiently different that integration raises significant difficulties. This paper surveys the potential benefits of integration - increased transparency and reduced administrative and compliance costs - and the potential obstacles, assessing the extent to which each of the differences between Income Tax and NICs - in particular the contributory principle, the levying of an employer charge and the differences in tax base - constitute serious barriers to integration. The paper concludes that few of the difficulties look individually prohibitive, but that trying too hard to avoid significant reform of the current policy framework could produce a merged tax so complicated as to nullify much or all of the benefits of integration.
Authors
Senior Economist
Stuart is a Senior Economist working in the Tax sector, and focuses on analysing the design of the tax and benefit system.
Glen Loutzenhiser
Working Paper details
- DOI
- 10.1920/wp.ifs.2007.0721
- Publisher
- IFS
Suggested citation
Adam, S and Loutzenhiser, G. (2007). Integrating Income Tax and National Insurance: an interim report. London: IFS. Available at: https://ifs.org.uk/publications/integrating-income-tax-and-national-insurance-interim-report (accessed: 19 May 2024).
More from IFS
Understand this issue
Public investment: what you need to know
25 April 2024
The £600 billion problem awaiting the next government
25 April 2024
A mess has been made of Child Benefit, and the clear-up operation may not be easy
29 March 2024
Policy analysis
Recent trends in and the outlook for health-related benefits
19 April 2024
4.2 million working-age people now claiming health-related benefits, could rise by 30% by the end of the decade
19 April 2024
Oil and gas make Scotland’s underlying public finances particularly volatile and uncertain
27 March 2024
Academic research
Intertemporal income shifting and the taxation of business owner-managers
24 January 2024
Insurance, redistribution, and the inequality of lifetime income
2 November 2023
The menopause "penalty"
18 March 2024