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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To think they should have increased tax rather than NI?

35 replies

needabreak5 · 31/01/2022 19:59

So those who earn below the threshold cumulatively across the don't have to pay more?

Eg students who only work in the summer, people on maternity pay, people who lose jobs, or reduce during the tax year. Anyone whose income massively fluctuates. If it was tax then they'd be able to claim it back. With NI they'll just be more out of pocket as you can't claim back in the next pay period or from HMRC :(

OP posts:
balancingfigure · 31/01/2022 20:05

Yes agree and for several other reasons!

Employers pay it to so they may reconsider jobs or just pay rises.

I don’t see why people with unearned income shouldn’t contribute too- wealthy old people, people with rental and investment income

Original poster
needabreak5 · 31/01/2022 20:09

Oh yes, the employers increase could well be paid for by not giving pay rises - so many employees will take the hit for that too unfortunately

OP posts:
OfstedOffred · 31/01/2022 20:14

I assumed it was slightly to stop employers under employing (refusing to give an employee more hours) to save on NICS

user1497207191 · 31/01/2022 20:18

Yes, or better still scrap it and increase income tax instead. The burden needs to be spread over everyone according to all income, not just on a proportion of workers. Far too many people don’t pay NIC and the burden falls on too few.

TurquoiseDragon · 31/01/2022 20:22

They don't want to put it on taxes as it'll upset their friends.

Ifailed · 31/01/2022 20:22

NI is a tax.

littleowls83 · 31/01/2022 20:29

I'm being hit by NI despite only earning about £7k a year as some months I do overtime as my work is really seasonal. Annoying. Its so people feel like they pay less tax, because something that doesn't have tax in the name isn't a tax, right??

user1497207191 · 31/01/2022 20:30

@Ifailed

NI is a tax.
Yes, but not on all income, only wages.
echt · 31/01/2022 20:34

@balancingfigure

Yes agree and for several other reasons!

Employers pay it to so they may reconsider jobs or just pay rises.

I don’t see why people with unearned income shouldn’t contribute too- wealthy old people, people with rental and investment income

Wealthy old people already pay tax at the same rate as non-OAPS. Landlords already pay tax.
RandomLondoner · 31/01/2022 20:40

There is an excuse for putting it on NI, the increase is for "health and social care" which are some of the sorts of things NI is supposed to pay for.

If they just put it on tax they'd have to admit NI is just another income tax, and merge them properly. I would quite like that, to have a simpler and logically consistent system. Unfortunately my idea of doing it properly would mean a basic rate of tax of 40%, which would be less palatable to voters than the current smoke and mirrors set-up, even though it would make virtually no difference to take-home pay.

Original poster
needabreak5 · 31/01/2022 20:40

Wealthy old people already pay tax at the same rate as non-OAPS. Landlords already pay tax.

But they don't pay NI, so they won't share the burden of the tax (and NI is a tax) increase.

OP posts:
HainaultViaNewburyPark · 31/01/2022 20:41

It’s a deliberate ploy to exclude pensioners from having to pay anything extra. An increase in income tax would be fairer.

JuergenSchwarzwald · 31/01/2022 20:42

Employee NI should be done away with altogether and we should just have income tax. They think we are to stupid to realise NI is a tax Angry

canary1 · 31/01/2022 20:42

Totally agree. It’s a disgrace that some people like wealthy OAPs are not sharing the burden

Original poster
needabreak5 · 31/01/2022 20:43

@littleowls83 this is exactly the issue I'm talking about! It's not right that you'll be hit by the increase, when someone with a more passive income doesn't share it.

OP posts:
Wfhquery · 31/01/2022 20:45

@balancingfigure

Yes agree and for several other reasons!

Employers pay it to so they may reconsider jobs or just pay rises.

I don’t see why people with unearned income shouldn’t contribute too- wealthy old people, people with rental and investment income

Tax on dividends is going up by same amount as ni increase
catinthewindow · 31/01/2022 20:45

@needabreak5

Wealthy old people already pay tax at the same rate as non-OAPS. Landlords already pay tax.

But they don't pay NI, so they won't share the burden of the tax (and NI is a tax) increase.

Exactly this. I work with numerous people on good salaries but over retirement age. You stop paying NI once you qualify for pension. This makes sense when you’re thinking about someone not working and relying on a low pension. But I don’t understand at all why someone earning 100k doesn’t have to pay NI just because they’re 65+ or whatever the age is now. Plenty of pensioners on really high incomes still relative to the working population. Why don’t they have to pay when someone earning 12k does?!
Wfhquery · 31/01/2022 20:46

@canary1

Totally agree. It’s a disgrace that some people like wealthy OAPs are not sharing the burden
Pensioners will pay the increase if they have earning income from 2023, its social care levy so seperate to ni, it’s just added to ni for 22-23 to give time for computer systems to be updated
trunktoes · 31/01/2022 20:46

Well someone who is earning 100k in pensions has probably paid loads of NI and won't be using it for as long as those who are younger. I think part timers should pay more. They still use the doctors etc

echt · 31/01/2022 20:49

But they don't pay NI, so they won't share the burden of the tax (and NI is a tax) increase

I'm not arguing against these people paying tax as the OP suggests, just pointing out they already do.

OnlyFoolsnMothers · 31/01/2022 20:50

@needabreak5

Oh yes, the employers increase could well be paid for by not giving pay rises - so many employees will take the hit for that too unfortunately
Yep my employer has done just this!
Beancounter1 · 31/01/2022 20:51

There is an excuse for putting it on NI, the increase is for "health and social care" which are some of the sorts of things NI is supposed to pay for.

That idea was put about only in recent decades - New Labour I think started that particular scam. NI was originally just a contribution to pensions and benefits, nothing to do with NHS or social care.

Rich politicians and their rich donors don't like increasing income tax as it affects their own finances too much.

Kendodd · 31/01/2022 20:51

I agree. Or better still put it on unearned income like inheritance tax.
NI will hit the poorest the hardest which I suppose is only to be expected of the Tories.

TurquoiseDragon · 31/01/2022 20:52

It's all about appearances. Nothing else.

All monies raised by the Government goes into one, big pot. It's called the Consolidated Fund. The Chancellor then decides each year how he's going to dish it out.

None of the money is separated into different pots when it's collected. EG, money raised by Vehicle Excise duty is not set aside to repair roads, like some people think. NI is not set aside to pay pensions.

It's all smoke and mirrors.

SoManyTshirts · 31/01/2022 20:54

It’s not just pensioners and the idle rich who don’t pay NI, it’s also (off the top of my head from tax law circa 1987) landlords and people who are self-employed through their companies and take their pay as dividends. The ones who complained that they weren’t eligible for furlough on the back of their non-existent contributions.

As pension is determined by the NI you have paid, paying it after retirement age could theoretically increase the amount of your state pension in future years - if you don’t already have the max entitlement. Can’t see HMRC’s IT department being able to cope with that.