In an attempt to make our unfathomable taxation system a little more intelligible, National Insurance looks set to be renamed “Earnings Tax” as new legislation is introduced to parliament this week.
National Insurance has been part of the taxation landscape since 1911 – the original earnings stamp system that created the expressions ‘paying your stamp’ and being ‘given your cards’, which was a reference to receiving your insurance stamp card when you lost your job!
Many believed it was created to fund a large part of the First World War effort – but this is both unclear and unsubstantiated! National Insurance did, however, become a cornerstone of the Welfare State that the Attlee government campaigned for after W2.
The new plans, said to have the backing of the chancellor George Osborne, are being championed by the MP Ben Gummer, who said: “This would be a really good step forward in making what the Government takes from taxpayers clearer and simpler.
“The most important part is changing the name so, in the public mind, we can begin the two as the same, which they are” – whatever that means!
What I believe he is suggesting is that the changes are expected to be a major step towards formally merging NI with income tax, and so making the taxation system much simpler to communicate and administer.
Whilst politicians debate the semantics, employers will wonder if and when the burden of this regressive tax on jobs will be reduced in the future. For the brand-minded among us, it’s a perfect example of a simple change bringing huge communication and positioning benefits to all concerned.
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