United Kingdom: Delaying Consultations on Integrating Income Tax and National Insurance
The U.K. government has announced a delay in consultations on the options for integrating the operation of income tax and National Insurance.
In Budget 2011, the U.K. government announced plans to consult on options to integrate the operation of income tax and National Insurance contributions (NICs).
The U.K. government was due to announce a further consultation detailing options for the integration of the operation of tax and national insurance during April 2012.
The government has now announced1 that this is being delayed until after the summer as a result of further work required to develop the options for integration. The delay also reflects the need to consider the way in which an integrated system would interact with planned reforms to the welfare system, and also a request from some stakeholders that further consultation be held off until after the London Olympics.
The government is to provide a further update in the autumn, and notes that “this is a long-term reform on which the government will proceed with care.”2
This delay is not unexpected and highlights the complexity of the current systems and the difficulty of making changes. This cautious approach is welcome. A further update will follow as soon as the document is published after the summer.