The
Institute of Directors (IoD) and the British Chambers of Commerce, have both
called for National Insurance (NI) to be amalgamated into the Pay As You Earn
(PAYE) tax system.
Both
organisations said that NI has moved away from its original purpose as a contributory
welfare fund and claim it is increasingly being used to finance current
spending and is merely another tax.
George
Cox, director-general of the IoD, said: "The only argument against
changing things is political. It [NI] is serving no real purpose. What we have
is an extension of the taxation system masquerading under a different
guise."
There
is also the cost of running what are effectively two parallel systems, said
Cox. NI employs 3,400 civil servants with an estimated wage bill running in excess
of £200m a year.
Cox
said amalgamation would offer industry huge savings and a "significant and
permanent reduction in red tape".
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