Debate Magazine

Most Employees Pay Far More National Insurance Than Income Tax

Posted on the 17 April 2018 by Markwadsworth @Mark_Wadsworth

The 'earnings threshold' for NIC is lower than the personal allowance for income tax; and for basic rate taxpayers, total NIC is 25.8% of earnings above the threshold but income tax is only 20% of earnings above the personal allowance.
At the top of the basic rate band, it's £9,786 NIC and £6,900 income tax.
Above that, it flips over, NIC is 'only' 15.8% of earnings but income tax is 40%.
The break-even point at which you pay the same amount of NIC as you do income tax is about £58,300, which you can check here, so only the top few per cent of employees actually pay more income tax than they do NIC.
VAT raises approx. the same amount as National Insurance, meaning that a majority of employees probably pay more in VAT than they do in income tax as well.
Just sayin'.

Back to Featured Articles on Logo Paperblog