Letter: Taxing issues

It's clear that there is a great deal of public confusion around the taxation system - little wonder given the constantly shifting policies in this area.

In the 2011 Budget (your reports), the government discussed the possibility of merging NICs (national insurance contributions) and income tax; a move designed to simplify the existing system.

However, there will be a number of caveats to make this viable for different sections of society (ie pensioners who continue working, those who have retired early and employers) and it is likely that the reformed system will start off being more complex before it gets simpler.

While the proposed merger would make the tax system more transparent, taxpayers are unlikely to like what they see. When combined, the basic tax rate would move to over 30 per cent, while the top rate of tax would be 52 per cent. Paying some form of tax is a certainty, but this total tax dedication will seem daunting to many workers.

The Association of Chartered Certified Accountants would also urge that the merger is not seized upon by government as an opportunity for increasing its overall tax take.

CHAS ROY-CHOWDHURY

Head of taxation at ACCA

Lincoln's Inn Fields, London