Budget 2011: Govt to consult on merging income tax and NI

The Chancellor has announced the Government will consult on merging income tax and national insurance.

Delivering the Budget today, George Osborne said the anomalies resulting from having two systems are “legion”.

He said: “This will dramatically simplify the tax system. For decades we have run national insurance and income tax as two different taxes and forced businesses large and small to operate two different system of administration. The resulting anomalies are legion and it imposes totally unnecessary cost and complexity on employers.”

He said he is not intending to extend national insurance to pensioners or to abolish the contributory principle.