National insurance

Nodiggidy123

Nodiggidy123

Nodiggidy123

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following the thread regarding tv licenses it got me thinking about national insurance.

in my eyes its the principle, i am being forced to pay a percentage of my salary for services i dont use or cannot recieve.

i dont have a full understanding of what is included within the national insurance system so please join in the discusion

would u prefer to pay less/no national insurance and source the services privately? ie health care.
 
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National Insurance is just an additional tax. It is not and has never been ring fenced for either the NHS, benefits or your pension. It just goes into the general pot and is spent on whatever the government of the day decides to spend it on.

I believe you can choose to pay less NI if you opt out of SERPS in a private pension scheme but that was 11 years ago so my memory is a bit hazy on that.

Sorry to disappoint you but your Car tax doesn't go on the maintanence of the roads either.
 
Benefits that depend on NIC contributions

Your entitlement to the following benefits and/or the amount you can get will depend on your (or in some cases your spouse or civil partner's) NIC contributions:

* Contribution based Jobseeker's Allowance (Class 1 NICs only)
* Incapacity Benefit (if you can't work for long periods due to illness or injury)
* Contribution based Employment and Support Allowance (ESA)
* State Pension
* additional State Pension (Class 1 NICs only)
* Widowed Parents' Allowance
* Bereavement Allowance
* Bereavement Payment
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http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/DG_4015904
 
Is it possible to source the services you receive privately for such a low cost?

I dont think it is, however i do believe i read somewhere that you can opt out of the nat ins contributions.

Its the tax that cripples most peoples wages, not the nat ins contribution.
 
There is indeed a considerable lack of tax hypothecation in UK. We have numerous taxes specifically targeting a commodity or purpose yet the Government uses revenues in wildly varying ways.

I can understand perhaps taxes on alcohol and smoking don't need to be hypothecated as the revenue far exceeds necessary public funding on any related issues. However, things such as green taxes and to an extent, national insurance contributions could gain a political party a lot of popularity with the voting population should they be hypothecated.
 
zootfloot said:
Is it possible to source the services you receive privately for such a low cost?
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As it doesn't actually pay for anything specifically and varies depending on how much you earn and what services you want then that is pretty much an impossible question to answer. If you look at the pension however if the government had been a private pension provider it would have been closed down a long time ago...

zootfloot said:
I dont think it is, however i do believe i read somewhere that you can opt out of the nat ins contributions.
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You can reduce some of your contributions but only if your pension scheme ops out of SERPS or whatever has replaced SERPS. This may or may not still be true.

zootfloot said:
Its the tax that cripples most peoples wages, not the nat ins contribution.
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National Insurance is tax, you shouldn't really think of it any differently as it isn't actually ringfenced for what they say it is. In reality you should add both together and that is the true cost of taxation.
 
N9ne said:
I can understand perhaps taxes on alcohol and smoking don't need to be hypothecated as the revenue far exceeds necessary public funding on any related issues. However, things such as green taxes and to an extent, national insurance contributions could gain a political party a lot of popularity with the voting population should they be hypothecated.
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And then lose them a ton when they have to put up income tax to cover the shortfall...
 
Nodiggidy123 said:
but you can get a lot of those services privately.

once again it comes to choice. if u dont require x service then u have the option to not pay for one.
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I can see where you are coming from, but it's a collective tax.

If millions of people opted out of paying for NHS, for example:

There would be millions of people (low income, in poverty etc) unable to access the NHS through lack of funding from the Government.

The government then would have to increase taxes to bolster the NHS for those people or if the NHS collapsed then the government would have to pay for Private treatment for those people unable to afford it.

Either way, your taxes would increase.
 
RDM said:
And then lose them a ton when they have to put up income tax to cover the shortfall...
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As far as I know, the definition of a hypothecated tax is that all the revenue is spent on that particular purpose. Therefore, they would continue using the aggregate "pot" to fund the short-fall, assuming, of course, that revenues are always short. If there is excess revenue (unlikely) then of course they would either adjust their budget or move the excess into the aggregate "pot".
 
seaviewuk said:
I can see where you are coming from, but it's a collective tax.

If millions of people opted out of paying for NHS, for example:

There would be millions of people (low income, in poverty etc) unable to access the NHS through lack of funding from the Government.

The government then would have to increase taxes to bolster the NHS for those people or if the NHS collapsed then the government would have to pay for Private treatment for those people unable to afford it.

Either way, your taxes would increase.
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Exactly. Massive reductions in revenue would mean many parts of the NHS cannot cover their fixed costs ultimately resulting in the privatisation of the NHS, which is another debate.
 
N9ne said:
As far as I know, the definition of a hypothecated tax is that all the revenue is spent on that particular purpose. Therefore, they would continue using the aggregate "pot" to fund the short-fall, assuming, of course, that revenues are always short. If there is excess revenue (unlikely) then of course they would either adjust their budget or move the excess into the aggregate "pot".
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Right, get it now. However it is a zero sum game. The amount of tax that needs to be paid remains the same. So you either have income tax shoot up because it is no longer getting extra from NI or (as is more likely) NI goes through the roof to pay for benefits, pensions and the NHS. Due to the different ways they are calculated you are certainly going to have winners and losers. As NI has a ceiling, it would probably be low and middle income earners that have to pay the extra, not really a sound vote winner.


I would ask though why you think duty on Petrol, Alcohol and Tobacco should be immune to such a system? Why should drivers, drinkers and smokers subisdise others? Also how would you assess the costs associated with the collection of green taxes? The current green taxes do next to nothing to actual tackle green issues.
 
RDM said:
it would probably be low and middle income earners that have to pay the extra, not really a sound vote winner.
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but if the low and middle income earners opted to pay for things privately then surely that is there own fault and votes wouldnt come into it if the majority wanted to go private.

i may be extremely selfish when it comes to money but i really dont see why i should pay for things i dont use or cannot get. i dont care if some chav doesnt get his doll money as a result. get a job! why should my hard earned money benefit anyone else but myself?
 
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ni is used for paying other things, its just a nice way of a hidden incometax, infact last year i heard that you only need 6% ni to cover what its meant for.
 
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