Firstly, you seem to be forgetting that part of the NI contribution comes from the employer, not the employee - and that that part does not cease for an employee past retirement age. Secondly, I believe that more than one Chancellor in recent times has asked the Treasury to model ways that NI could be incorporated into income tax, and they have been unable to find a way that would not result in a significant number of taxpayers being worse off - resulting in either a taxpayer revolt or a cost to the Treasury to compensate them. NI was originated over a century ago and is so much an integrated part of the UK tax system that scrapping it would cause massive administrative difficulties. It would also significantly increase the headline rate of income tax, which, while it would be more honest, would be political suicide for whatever government introduced it.It would, incidentally, make the idea of service companies, such as those used by many top earners at the BBC, largely redundant as they can currently avoid NI by paying themselves dividends which attract only income tax. So while it would seem sensible to do what you say and formally incorporate NI into income tax, the likelihood of it happening is remote.
Richard Greenhough ● 2392d