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Tax Body Calls For The Integration of Income Tax And National Insurance Contributions

This year’s Finance Bill is close to gaining Royal Assent and the Chartered Institute of Taxation (CIOT) has already submitted its “wish list” for the 2009 Budget. One of the suggestions put forward is that income tax and National Insurance Contributions (NIC) should be merged into one tax. Failing that “radical” change, the CIOT suggests that there should be further alignment between the two taxes.

The wish list forms part of a submission by the CIOT to Dave Hartnet the acting head of HM Revenue & Customs. Other items on the wish list include:

  • A Statutory Residence Test,
  • A small benefits exemption (£25) so that trivial employee benefits are tax free and need not be reported,
  • An “Elderly Care Vouchers” exemption based on the current Child Care Vouchers system,
  • An extension of the Gift Aid system to include non-UK charities, and a similar extension for inheritance tax purposes, and
  • A suggestion that the proposed “income shifting” provisions, currently postponed until next year should be “quietly dropped”.



Date: 21st July, 2008
Author: Liz Cuthbertson


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