The Treasury has issued a call for evidence on the potential integration of income tax and national insurance contributions.
The Government announced its intention to consult on the integration of NI contributions and income tax in the Budget in March.
In a foreword to the call for evidence, published today, Treasury exchequer secretary David Gauke says: “For decades, we have operated income tax and NICs as two fundamentally different systems with different periods and bases of charge.
“The resulting anomalies impose costs and complexity on employers, and cost the taxpayer through the administration burden on HM Revenue & Customs.
“We believe the greater integration of the two systems has the potential to remove economic distortions, reduce burdens on business, and improve fairness across individual earners.”
The Government says it will maintain the contributory principle that underpins the NI system. It will not look to extend NICs to individuals above state pension age or to pensions, savings and dividends.
The Treasury will consult further on reform options in the autumn.