Comment: How do we want to be taxed?
By Simon Sweetman
One of the perennial cries of the accountancy profession is "NI is just a tax, after all. Why don't they merge it with income tax and have done with it?".
But it isn't as simple as that. For a start, only earned income attracts a charge to NIC, and then only if you are between 16 and 65. Also, the employed and the self-employed pay different rates under different classes of NIC and are also entitled to different benefits.
The Federation of Small Businesses actually started life as a protest against the imposition of Class 4 NIC.