According to reports this morning, the Tories first came up with the idea last year, but pulled plans to announce it.

They are now understood to be resurrecting the idea, with the aim to introduce the change in a future Parliament.

The radical change would mean the end for national insurance, a big chunk of everyone’s tax bill which has been around since 1911 when it was unveiled to help poorer families cope with medical bills and unemployment.

Various groups have attacked it over the years, saying it is no longer fit for purpose, and according to the Independent, senior Tories including the Chancellor support the plan.

Chancellor George Osborne backed off from announcing a future shake-up of the tax system last year because of problems integrating computer systems, the paper said.

However, they believe the change – which is being actively considered by party chiefs – would make it clearer to taxpayers how much of their earnings they are handing over to the state.

The move would mean basic-rate taxpayers handing over 32% of their earnings and higher-rate taxpayers returning 52%. Employers’ NI contributions are likely to remain unchanged under the plan.