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Tories considering campaigning on tax system simplification

The Conservatives like to say they support British businesses, including the self-employed, but now they may be ready to put their money where their mouth is.

Believe it or not, but the Tories are kicking about the idea of including a new tax system simplification proposal as a talking point just in time for the next general election. The idea is to combine income tax and National Insurance into just one sum in an effort to streamline the process and also provide better transparency.

The new ‘earnings tax’ as it may be come to be called would mean around a 32 per cent rate for those paying basic tax, while anyone qualifying for the higher rate will have to shell out a grand total of 52 per cent of their taxable income every year. This is something that Chancellor George Osborne has been purportedly attempting to slip into the Budget but balked this year, mostly because there’s already been so many problems with the whole Real Time Information programme for PAYE that he must have thought better of it – at least waiting until the kinks are worked out of the system.

Now regardless of what you may think about the Tories, you have to hand it to them – a system like this would definitely benefit the nation’s cadre of freelancers and contractors. In fact any self-employed Brit will likely benefit from a simplified tax system, especially since it will lessen any administrative burdens contract workers are currently under – and for what it’s worth, it seems that it would make compliance more than a bit easier as well!

So on the surface it does seem like a good idea. Many people may feel that the tax system is overdue for a serious overhaul, as it’s been decades since any substantial changes have been made to it. Of course plenty of other people simply feel that you shouldn’t meddle with things that are working correctly, as throwing a spanner in the works isn’t exactly the best way to keep a finely-tuned piece of machinery like the British economy going. I suppose it remains to be seen if the Conservatives actually come forward with this new plan in time for the next general election – and whether it truly will benefit the self-employed.

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