The firm commissioned the BritainThinks polling organisation to convene a so-called ‘citizens’ jury’ to examine reforms to the tax system as part of its Paying for tomorrow: future of tax project. Twenty two members of the public spent two days debating the purpose of tax, who should pay it and how it should be levied.
Among the jury’s recommendations, published today, was a call for income tax and National Insurance to be integrated as the jury concluded that misconceptions over the purpose of NI showed the current system was misleading.
The panel also stated there should be no change in the balance of taxes from income towards wealth or consumption, concluding that the current balance is about right. The group recommended abolishing inheritance tax but replacing it with new and higher bands for council tax and stamp duty land tax.
The jury’s call for income tax and NI to be integrated comes amid reports that such a scheme will form part of the Conservative Party’s manifesto for the next election.
A report in The Times today said Chancellor George Osborne considered going ahead with a merger – which he first mooted at the 2011 Budget – in March, but concerns over the implementation of a single computer system scuppered the plan. It was now likely to form part of the party’s prospectus for the general election in May 2015. Responding to the report, the Taxpayers Alliance campaign group said such a reform could provide a boost to economic growth.
Chief executive Jonathan Isaby said the current system was archaic, confusing and opaque, with the difference between NI and income tax being academic.
‘Merging the two would make taxes far more transparent and people will be able to see exactly what they hand over to the taxman when they receive their pay packet,’ he said.
‘This long overdue move would be a bold first step towards delivering a system that taxpayers can trust once again.
‘The government’s first priority must be to deliver the conditions for economic growth, and radical reform of the tax system to make it simpler and fairer is absolutely vital in the pursuit of that goal. The sooner this change is enacted the better, giving taxpayers the honest system they deserve.’
Merging the two tax rates was one of the recommendations of the TPA’s 2020 Tax Commission which reported in May 2012.
