Independent report

OTS publishes further report on the closer alignment of IT and NICs

The OTS publishes findings of further work looking at the impacts of closer alignment of income tax and national insurance.



The Office of Tax Simplification (OTS) has published its further review on the closer alignment of income tax and national insurance, reaffirming its call for this outdated system to be reformed to make it fit for the future.

This report builds on the Office of Tax Simplification’s first report on this subject published in March 2016.

That report concluded that aligning the way the two taxes are calculated would create a simpler, more transparent and fairer system for taxpayers and employers, and set out a 7 stage programme for bringing the two taxes closer together.

It also highlighted that the potential changes could impact on millions of people, who could gain or lose as a result.

As the OTS recommended, further work was commissioned to get a fuller picture of the potential impact of the two key aspects of the proposals:

  • calculating employee NICs on a similar basis to PAYE
  • moving employer NICs to a payroll levy

Today’s published report covers the findings of this work.

Access the news story.

We are also publishing the following documents alongside the main report:

  • Closer alignment of income tax and NICs: at a glance
  • Closer alignment of income tax and NICs: report summary
  • NICs code: design options paper
Published 14 November 2016