Merger of tax and NI offices 'a failure'

A fortnight before the Chancellor, Gordon Brown, is expected to announce a major increase in National Insurance Contributions, the Institute of Chartered Accountants in England and Wales (ICAEW) today condemned the three-year-old merger of the Inland Revenue and the National Insurance Contributions Office as a failure.

When the merger took place on 1 April 1999, the Inland Revenue claimed it would: cut the burdens on businesses and people; share experience, knowledge and skills in combating avoidance and make better use of resources; enable a more joined-up approach to customer service; achieve a gradual alignment of the tax and NIC rules.

But Peter Bickley, Technical Manager at the ICAEW's Tax Faculty, said: "In spite of raising more revenue than VAT, and more than corporation tax, CGT and IHT combined, National Insurance Contributions appear to be regarded as the 'Cinderella' of taxes. The handling of NIC matters appears if anything to be getting worse."

ICAEW members report long delays in dealing with correspondence or itbeing ignored; lack of consistency between offices and the helpline; NIC issues and problems appearing to have been downgraded in importance; key NIC personnel moving on; claims for repayment becoming more complicated.