EY Budget reaction: Integration of income tax and national insurance is still a long way off

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Graham Farquhar, employment tax partner at EY comments on the integration of National Insurance and Income Tax:

“The integration of income tax and national insurance is still a long way off, but the consultation needs to start sooner rather than later. The merging of these two taxes is extremely complicated.  The fundamental differences between National Insurance and Income Tax, such as age limits and what is actually subject to either tax or National Insurance, will need a lengthy period of consultation to sort out and we will be hearing about this in many budgets to come.

“For example National Insurance is only payable by individuals between 16 years old and the state pension age, whilst tax has no such limits.  Also income tax is paid on almost all income but the definition of 'earnings' for National Insurance is much tighter and doesn't include benefits in kind.”