ACCA - The global body for professional accountants
While proposals for change are being made, we should show taxpayers much more clearly what their tax deductions are being spent on
—Chas Roy-Chowdhury, head of taxation, ACCA

ACCA responds to Government proposals for tax transparency and integration of National Insurance and Income Tax

Creating greater transparency and clarity can only be better for both the tax payer and tax administrations, says ACCA (the Association of Chartered Accountants) today in response to Government proposals to combine income tax and national insurance payments in one single figure.

Earlier this year, ACCA conducted research into the UK public’s understanding of the tax system, which showed that:

  • Over 90% of respondents were unaware of the full impact of indirect taxes on their paypacket (an additional 22% of the average salary is spent on other taxes after income tax has been deducted)
  • There is widespread confusion as to items affected by VAT
  • Only 14% knew the state retirement age for men and women would be from 2020
  • Only 47% of respondents had checked their tax code with HMRC despite well-publicised coding problems that have led to tax over- and under-payments

Chas Roy-Chowdhury attended the Government briefing today (14 November) and says: 'Policy-wise we need to strive towards a tax system which people understand and do not feel disenfranchised from- essentially we need a tax system which does exactly what it says on the tin. 

'People should have a right to know exactly what their tax rate is and why it is that rate. And while proposals for change are being made, we should show taxpayers much more clearly what their tax deductions are being spent on rather than keeping it wrapped up in the publication of the Budget Red Book – which not a lot of people have the time to source or search through.

'Modernising the Administration of the Personal Tax System is an important document and we’d urge people to take part; but we shouldn’t forget the fact that businesses need a simple tax system too,' concludes Chas Roy-Chowdhury.

In relation to National Insurance Contributions (NIC) and Income Tax (IT) CRC said: 'If we had a different starting point we would have encouraged a merger of the two taxes but as things stand we welcome all possible moves to align and simplify the two regimes. But we would NOT welcome a merger as pensioners and the self-employed among others could lose out enormously. 

We will seek to work closely with the Government on these two worthwhile and difficult initiatives.'