OTS survey on the alignment of tax and NICs

02 December 2015

Earlier this year we reported that the Office for Tax Simplification (OTS) had agreed with the government to undertake a further review into the closer alignment of income tax and National Insurance contributions (NICs).

Since then a small group of CIPP members has met with representatives of the OTS in a Policy Think Tank to discuss face to face where the complexities lie in the current differences between income tax and NICs. For example there are differences in the definition of income, depending on whether an individual is employed or self- employed, and in the treatment of expenses and benefits. In addition, income tax is calculated on annual income whereas NICs is calculated each time an individual is paid.

The OTS has now issued two surveys in which they would like to explore these issues further. There is one survey asking for issues affecting individuals, and that covers all of us, and then there is another survey asking for responses from employers, agents and payroll providers. In each case, the OTS is trying to establish what difficulties these differences give rise to, and what you think could be done to simplify the system.

In light of the fact that there are two surveys to complete, and there is a tight deadline of 31 December for completing the surveys, the CIPP Policy Team is not publishing its own survey but is instead urging all CIPP members to complete the OTS survey(s). The OTS estimates that the survey for individuals should take around five minutes to complete and the survey for employers, agents and payroll providers is more detailed, but may well have a bigger impact on our working lives, and should take around 15 minutes to complete.