Class 2 NICs moved into SA
The collection of Class 2 National Insurance Contributions (NICs) for the self-employed will be moved into self assessment, the Chancellor revealed this afternoon in his 2014 Budget.
The change will take effect from April 2016 and is expected to remove red tape for up to five million people, George Osborne said.
The simplification of Class 2 NICs comes as a welcome move, however rather than being a move towards an income tax and NICs merger, it relates to the collection rather than the calculation and operation of tax.
Rather than representing a first step towards amalgamation, BDO remuneration partner Philip Fisher pointed out that the Chancellor spoke of it as an OTS policy recommendation to “move the collection of Class 2 NICs into self-assessment, abolishing for 5m people this wholly unnecessary bureaucracy”.
“If this was the first step towards merging tax for the employed and self employed, that would be by far the most exciting part of the Budget,” said Fisher. “Where’s this earnings tax we heard so much about last week?”
Alex John from TaxCalc...