A recent article for Tax Journal looks at the case for reform of employer’s NIC.
Aligning the main 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£65 billion 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.
In a recent article for Tax Journal*, Colin Ben-Nathan, a partner at KPMG in the UK, takes a look at the case for reform of employer’s NIC, and the ways in which it could be carried out.
*First published in Tax Journal on 30 June 2017. Reproduced with permission.