National Insurance Contributions Bill
10:40 am
Jonathan Athow: The overall reforms that were announced in Budget 2007 represented a reduction in the taxation on employment and were funded by revenue raised elsewhere in the tax system. In broad terms, there was a tax cut related to those elements around the removal of the 10p rate of income tax—the cut to the basic rate—and the alignment of the upper earnings limit with the point at which you start paying income tax.
The aim for higher income individuals—those who will be basic rate taxpayers after the reforms have been introduced—was to leave them no better or worse off. The overall package, which increases the upper earnings limit for those taxpayers but enables them to enjoy a cut in the basic rate, should leave them no better or no worse off overall than they would have been if the Budget 2007 reforms had not been implemented.