Time for a different approach on employer’s NIC? | KPMG | UK

Time for a different approach on employer’s NIC?

Time for a different approach on employer’s NIC?

In a recent article for Tax Journal,* Colin Ben-Nathan takes a look at the case for reform of employer’s NIC, and the ways in which it could be carried out.

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Aligning the main national insurance contribution ("NIC") rate for the self-employed with the employee class 1 NIC rate has much to commend it, provided there is broad equivalence in benefit entitlement. But this still leaves employer’s NIC which only applies to employees and which tends to discourage businesses from hiring staff and to depress wages. The c. £65bn raised each year means reform is not easy.

One approach may be to base employer’s NIC on business operating costs rather than employee wages. This would level the playing field across employment and self-employment, address the impact of employer’s NIC on jobs and future-proof exchequer revenue against increasing automation.

Read the full Time for a different approach on employer’s NIC?* article. 

 

* First published in Tax Journal on 30 June 2017. Reproduced with
permission.

 

If you have any queries or comments, please do not hesitate to get in touch with your normal contact or e-mail employersclub@kpmg.co.uk

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