Income Tax, National Insurance Contributions and the case for alignment

AuthorHarry Milligan
Dundee Student Law Review, Vol III, No 2
Income Tax, National Insurance Contributions
and the case for alignment.
Harry Milligan
Academics and politicians have been making the case for alignment of
Income Tax (IT) and National Insurance Contributions (NIC) since the mid-
twentieth century.1 The case has been bolstered by contributions from the
Office of Tax Simplification (OTS) which is mandated with rendering the UK
tax system more readily understandable. A comprehensive discussion of the
NIC and IT system is beyond the scope of this work. The pursuit shall be to
dissect the case for alignment made in the literature, in particular the work of
Glen Loutzenhiser as a long-time advocate of alignment and a respected leader
in the tax field.2 Assessing the four arguments given prominence in the
literature indicates a strong case for alignment. The arguments are that (1) the
“contributory principle” is illusory, (2) the current system could be made more
1 A Peacock and G Peden, ‘Merging National Insurance Contributions and Income Tax:
Lessons from History’ (2014) 34 Institute of Economic Affairs 2.
2 Glen Loutzenhiser, BComm (Sask), LLB (Toronto), LLM (Cantab), MA (Oxon), DPhil
(Oxon) is Associate Professor of Tax Law and Tutorial Fellow of St Hugh's College.

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