02
Abolish Employee National Insurance
Stop taxing work twice.
Abolish employee National Insurance as a separate deduction from wages and bring employment income within one clearer progressive personal tax system, integrated with the Universal Standard Income.
Published Manifesto 1.0 policy. The sections below set out the proposal as published. Questions and challenges are open questions, not settled answers.
Key figures
- Employee NI
- Abolished
- As a separate deduction from wages.
- Employer NI
- Not abolished here
- Addressed by a separate proposal.
- Taxes on earnings
- Two → one
- One transparent progressive system.
01 · The Idea
Proposal 02 would completely abolish employee National Insurance as a separate deduction from wages.
The distinction between Income Tax and employee National Insurance would be removed, so that earnings are taxed through one clearer progressive personal tax system rather than two overlapping ones.
02 · How it works
Employment income would sit within a single progressive personal tax system, integrated with the Universal Standard Income set out in Proposal 01.
This does not mean workers pay no tax. Removing employee National Insurance removes one of two deductions on earnings; the remaining tax is set out in Proposal 03.
Employee National Insurance and Employer National Insurance are different things. Employer NI is not abolished under this proposal. The wider manifesto proposes progressively reducing Employer NI from 15% to 10% over ten years, but that is a separate proposal.
The principles behind Proposal 02
- Simplicity
- Transparency
- Rewarding work
- Coherent tax reform
- A new social contract
03 · Why it is being proposed
Two separate taxes on the same earnings make the true rate on work hard for people to see. A single progressive system is intended to be simpler and more transparent.
It is presented as part of the wider Manifesto 1.0 tax-and-income settlement rather than as a standalone tax giveaway.
What this proposal does not say
- Abolishing employee NI does not mean workers pay no tax.
- Employer National Insurance is not abolished by Proposal 02.
04 · Questions & Challenges
Nothing in Manifesto 1.0 is presented as settled fact. These are open questions the proposal must be able to answer — they are not answered here.
- 01Can Britain abolish employee National Insurance, replace the two-tax structure on earnings with one transparent progressive system, combine it with the USI, make work pay, and keep the public finances sustainable?
- 02What happens to the contributory principle — the link between National Insurance records and entitlements such as the State Pension?
- 03Who gains and who loses across the income distribution once USI, the single tax system and the removal of the Personal Allowance are taken together?
- 04How are pensioners, the self-employed and people with unearned income treated under a single system built around earnings?
- 05What are the transition risks for payroll, employers and HMRC systems?
Have Your Say
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