Abolish Employer's contribution towards National Insurance

Proposer
PaulJRobinson
State

Rejected

Vote Score

0

Age

2424 days


@PaulJRobinson edited economy.md - over 6 years ago

Given that there is a current tax gap (between tax due and tax recieved by the exchequer) of £120 billion, we propose the introduction of country-by-country reporting and a general anti-avoidance principle, in order to ensure that everyone living or doing business in the UK pays all the tax they owe.

Abolish employer's National Insurance contributions which are a tax on jobs and discourages employment. The abolition will boost the level of employment as well as wages.

Digital Economy

We will extend the requirement on basic, affordable telephony to broadband to help ensure homes have sufficient access to the internet and to keep pace with the connected digital economy.

PaulJRobinson

@PaulJRobinson - over 6 years ago

This pull request has been automatically generated by prose.io.

Floppy

@Floppy - over 6 years ago

How is the NI shortfall made up? I'm all for simplifying, but my concern is that this would negatively impact the social welfare budget.

philipjohn

@philipjohn - over 6 years ago

Given that we have lots of proposals that will impact the budget I'd suggests it's better to adopt those policies we feel are sensible and proportionate then later down the line we can crunch the numbers and tweak the policies as necessary at that point.

frankieroberto

@frankieroberto - over 6 years ago

Isn't the distinctions between the employer and employee contribution essentially arbitrary (given that both parts ultimately come from the employer)? Not sure I understand the aim of this.

Also 'a tax on jobs' is unhelpful language IMO.

Floppy

@Floppy - over 6 years ago

Yes, I'd want to see numbers on this one. I agree that the employer/employee distinction seems arbitrary, but I don't know enough.

philipjohn

@philipjohn - over 6 years ago

"given that both parts ultimately come from the employer" Not really, both the employer and employee pay NI contributions. See HRMC on this.

I know this means that there's less income, but I agree with the principle so I'm a 👍 with the caveat that we will need to look at whether we increase employee NI or corporation tax (or something else) to pay for it.

Floppy

@Floppy - over 6 years ago

I'm currently a 👎 on this until without clarification. I'm all for simplifying the tax system, but is the idea that: 1. employers will not pay the NI contribution, keep more money, and less goes into the NI pot? 2. employers pay the same amount overall, but NI is collected through corp tax instead? 3. employees receive more money and pay the NI instead?

Option 1 would worry me. Where does the "tax on jobs" thing even come from? Employing people costs money, this is just part of that, right? Is it purely a psychological thing that paying an insurance contribution to employ someone feels bad, or are there figures that mean that the financial burden falls unevenly on (for instance) small companies?

I need evidence on this one, basically.

tmtmtmtm

@tmtmtmtm - almost 6 years ago

Not really, both the employer and employee pay NI contributions. See HRMC on this.

That's a rather arbitrary distinction. It's derived from the amount of wages, and almost always deducted at source. It makes essentially no difference if (to pick random numbers), the employee contribution was 5% and the employer 15%, vs employee 15%/employer 5%, vs 10% each, vs 20%/0% in either direction.

philipjohn

@philipjohn - almost 6 years ago

It's hugely important. Wages are usually quoted in gross terms, but the proportion of NI paid by the employee is factored into lending decisions, affecting mortgages and other forms of borrowing.

The whole system of NI contributions is unnecessarily overcomplicated. All this PR really does it to simplify it. That's going to reduce the overhead of managing staff for businesses (smaller ones affected disproportionately), and make administration at HMRC easier, lowering costs for the state.

tmtmtmtm

@tmtmtmtm - almost 6 years ago

How wages are quoted is a fair point, and I'm certainly all for simplifying tax systems — but these seem like different arguments from "a tax on jobs [that] discourages employment", and that "abolition will boost the level of employment as well as wages". Those claims either need a lot more evidence, or, if they're not crucial to the point, should be dropped.

Floppy

@Floppy - over 5 years ago

My vote on here is better as a ✋, not a block. Under the new rules, this should be closed though. Does anyone want to move it on? If not, it'll be closed shortly.