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Brown prepares `pick-me-up'; be prepared for more increases in national insurance.

Document Cited in Related
Vincent
AuthorHayward, Cathy
PositionBudget 2003 - Gordon Brown

The changes to national insurance contributions (NICs) announced last year by the chancellor will take effect this month and raise 8 billion [pounds sterling] for the Treasury, but that's unlikely to stop him making further changes to NICs in his 2003 budget, according to tax experts.

Gordon Brown may level the playing field for employed and self-employed people by bringing the latter group within the scope of class-1 NICs. This would require them to pay both employer and employee contributions on their own earnings, which already happens in some other countries, according to George Bull, tax partner and head of Baker Tilly's professional practices group. Alternatively, the upper profits limit for class-4 NICs maybe abolished.

Increasing the upper earnings limit for NIC to the higher-rate threshold could raise about 1 billion [pounds sterling], pointed out Derek Leith, tax partner at Ernst & Young. And reducing the higher-rate threshold to the upper earnings limit for NIC could raise as much as 2 billion [pounds sterling].

John Whiting, tax partner at PricewaterhouseCoopers, told Financial Management: "With dark economic clouds looming, expect an `espresso budget': short and strong, with a few sweeteners to take away any bitter aftertaste and give the...

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