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Budget 2011: income tax and NICs, cars and childcare

The Chancellor announced a range of employment tax related changes and planned consultations in the Budget some of which apply from 6 April 2011 and others in the future.

Income tax and NIC reform: Perhaps most significant was the announcement that the government will be consulting on the possible integration of the income tax and NIC system. The intention is to reduce the burden on businesses but to maintain the NIC contributory principle.

The proposed merger will indeed be historic and is likely to take years to implement. There will be a myriad of complexities to negotiate not least the interaction with other Social Security systems around the world and in particular in Europe.

In bringing together the two systems it will highlight the actual rate of tax people are paying. For example based on current figures the first £7 475 of earnings tax would...

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