SCRAPPING NATIONAL INSURANCE

Wow that was a riveting budget yesterday, wasn’t it? About as interesting as the sludge in the bottom of the Chi canal. But what shook me to the core was the Chancellor’s remark about potentially scrapping National Insurance at some point in the future.

“We (the Tories) want to eliminate that double tax on work” he was quoted as saying in a media interview and this was soon backed up by Dishi Rishi in another public speech.

What Chancellor ‘Fiscal Drag Queen’ Hunt really means is that he wants to scrap NI so that it can be replaced with a single higher tax that will be levied against anyone that ‘earns’ more than the £12,570 threshold which includes those whose income sources do not come from traditional forms of employment ie pensions. You can bet your bottom dollar that this new Single Tax will be higher than both NI and Income tax combined and thanks to fiscal drag, will rake in even more revenue for Treasury coffers.

Now I have no objections to paying tax provided the Treasury then spend the money to address issues being faced by the people of the UK such as energy cost unfairness, pension poverty, skills shortages, lack of dentists, etc etc but instead the Government prefers to fritter cash away on Rwandan migrant schemes doomed to failure, the lazy French who can’t be arsed to stop the boats and a Ukrainian war that could rumble on into the next decade.

I have never viewed National Insurance as a double tax on work. I’ve always felt that the NI portion of deductions made from my pay packet were largely a separate provision for healthcare and a state pension. However, Dishi Rishi’s kicked that out of the ballpark stating that NI goes into the same pot as everything else instead of being specifically ringfenced for health or retirement so then there is little point having multiple deductions on a wage slip, it may as well all come out of income tax.

Making such frivolous statements without further detail on how this will all come about is pretty dangerous for the Tories especially in an election year. I have a few questions for the Fiscal Dragmeister myself on this topic so Jezza, if you’re reading this post then please do enlighten us on the following:

Firstly, how will this new Single Tax be collected from those who aren’t on PAYE but are over the income tax threshold? HMRC are already struggling with the workload they have so having to deal with millions more self-assessments from those not in employment is likely to push them over the edge.

And more importantly, how will monies from this new Single Tax be apportioned towards our state pensions? At present, entitlement to a full state pension is based on paying a full NI stamp for a set number of years. If the NI stamp is abolished, what will the new qualifying criteria for a state pension be based on? What will happen to the NI contribution made by employers? Is that being scrapped too?

My guess is that eliminating NI is the Tories precursory move towards scrapping the state pension. If re-elected they will no doubt increase working age to infinity whilst at the same time, forcing everyone into compulsory stakeholder pension schemes so that no-one ever gets a single penny from the Government.

Yes, by all means simplify taxes (something that the Office of Tax Simplification abolished by Chancellor Khazi in Sept 22 was always meant to do but never got round to it) but for f***s sake wait until you’ve worked it all out before dropping the bombshell!