1. National

Osborne may introduce radical shake-up of income tax

The Chancellor wants to merge income tax with national insurance if the Conservatives are re-elected in 2015, it has emerged. George Osborne hinted merging the two taxes into one "earnings tax" will be in the Conservative manifesto.

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What does national insurance pay for?

  • Dating back to 1911, national insurance was first implemented so working class people had some insurances against illness and unemployment.
  • This was expanded after WW2 to help fund the NHS and other social security schemes.
  • The Government has set national insurance at 12p for every pound earned.
  • It has grown up in parallel with income tax, which traces its roots to the 18th century and is administered separately.

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