Conservative backbencher Ben Gummer wants to rename National Insurance
Monday 24 February 2014
Ben Gummer, a Conservative backbencher and the MP for Ipswich, will be bringing forward a 10-minute rule bill in the Commons on Tuesday in which he will propose to change the name of National Insurance contributions to "Earnings Tax".
Ben Gummer has been pushing for more transparency in the tax system. According to his office, a change of name would "make the contributions clearer."
"National Insurance resembles an insurance policy less and less. Renaming it a tax would make it more honest in what it is, just another form of tax."
Mr Gummer hopes this could be the first step to merging Income Tax and National Insurance. "Both essentially tax the same thing," Mr Gummer told The Independent.
"Dividing them complicates things; it complicates things for companies, it complicates things for the Treasury, and it makes it more opaque to the taxpayers."
"My proposals are seeking to make the system more transparent, to help make the Government more accountable to the public.
"It's important more people get a clearer understanding of their taxes. This year, some taxpayers will be getting personalised statements, which will help them better understand how much they pay and where their money goes.
"Changing the name of National Insurance is just another step in that direction."
According to The Telegraph, the change brought to light by the MP would have caught the eye of the Chancellor, George Osborne. Quoting a source, the paper published the Chancellor was "attracted to the idea." When asked about this rumour, Mr Gummer told The Independent "I am pleased the Chancellor is interested.
"In the past, when I have brought up efforts to help with tax transparency, the Chancellor has been responsive and acted upon it."
Everyone aged over 16 and earning above a certain level has to pay National Insurance. According to HM Revenue and Customs, National Insurance "builds up your entitlement to certain state benefits." Contributions go towards paying for basic State pension, Jobseeker's Allowance and Maternity Allowance, among others.
National Insurance is deducted from pay checks on top of Income Tax for employees and workers paid through PAYE. Self-employed professionals pay a flat-rate contribution annually, along with additional Class 4 contributions for profits exceeding a certain amount.
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