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The Wyman debate at the ICAEW on potential new taxes was as thought-provoking as ever. Some of it was light hearted – a tax on young people’s use of social media went down very well among the older members of the audience – but there were some serious contributions.
The proposal which received the greatest support was the abolition of the age limit for employee National Insurance contributions. It does seem increasingly arbitrary that you are relieved of paying National Insurance contributions at a specified age given that compulsory retirement is largely a thing of the past. It is, of course, possible to argue the other way and say that after a long working life of contributions people deserve a break. There is also fear that if the age limit was abolished people over state retirement age would stop working because the tax burden was too high.
What is depressing, however, is that it is impossible to envisage a rational debate on this. As the panel said, the furore over the plan to withdraw free TV licences for the over 75s shows that emotion impedes sensible discussion. You can only imagine the headlines if the government even suggested a consultation on the abolition of the limit: ‘Kick in the teeth for the elderly – we should be treasuring our older workers not taxing them into the ground.’ As for one of the other proposals – abolition of zero rating for food – I leave you to write the headlines.
If we cannot even debate radical changes to the tax rules I fear we will be locked into a spiral of endless tinkering with the system as it stands –and we all know where that ends up.
If you do one thing...
Now the government has confirmed the off-payroll rules will be extended to medium and large firms in the private sector, the time is right to start preparing clients for the change. For details see tinyurl.com/offpayrolljul.
