David Gauke, the Treasury minister, has promised to “lift the lid on tax” by transforming “the customer experience of the personal tax system”.
At the recent launch of HMRC's discussion paper, 'Modernising the administration of the personal tax system: Tax Transparency for Individuals', Mr Gauke admitted that the UK tax system is difficult to understand.
The consultation document comes two weeks ahead of the Chancellor's autumn statement (29th November) and the publication of draft Finance Bill clauses (6th December), and sets out the government’s current plans to improve the personal tax system; including Real Time Information and integration of tax and NIC; and their vision for a more transparent personal tax system.
The consultation period will last up until 24th February 2012 and an update will be provided alongside the 2012 Budget, together with the release of HMRC's personal tax calculator that will allow individuals to calculate their tax.
Mr Gauke also suggested that a smartphone app may be in the offing too.
On the subject of income tax and NIC integration, David Gauke refused to advocate a full merger and was supported in his stance by the Tax Payers' Alliance and the Association of Chartered Certified Accountants.
Apparently the government is not keen to extend NIC to those above retirement age or to savings and Mr Gauke believes it is right to maintain NIC separately and that the contributory system is still relevant.
Complete unification of the two systems does require careful thought and will be a long process but it would help solve IR35.