The proposed treatment of disguised remuneration for national insurance contributions purposes would impose ‘impossible and unreasonable obligations’ on employers, according to the ICAEW Tax Faculty.
Commenting on draft regulations that HMRC published in August, the Faculty said the fact that proposed NIC rules were so different to the income tax rules was ‘all the more surprising and disappointing’ given the government’s consultation on integrating the operation of tax and NICs.
The Faculty said the decision to impose Class 1 NICs on amounts that are charged to income tax on the remittance basis was ‘perverse’. It had been recognised that it would be unreasonable to expect employers to deduct income tax under PAYE.
‘We recommend that, like income tax, the liability to NIC should be a post year-end obligation, which would make it a Class 1A charge,’ the Faculty said.
The proposed treatment of disguised remuneration for national insurance contributions purposes would impose ‘impossible and unreasonable obligations’ on employers, according to the ICAEW Tax Faculty.
Commenting on draft regulations that HMRC published in August, the Faculty said the fact that proposed NIC rules were so different to the income tax rules was ‘all the more surprising and disappointing’ given the government’s consultation on integrating the operation of tax and NICs.
The Faculty said the decision to impose Class 1 NICs on amounts that are charged to income tax on the remittance basis was ‘perverse’. It had been recognised that it would be unreasonable to expect employers to deduct income tax under PAYE.
‘We recommend that, like income tax, the liability to NIC should be a post year-end obligation, which would make it a Class 1A charge,’ the Faculty said.
