Is HMRC playing politics?

First published on 09 March 2022 by Alastair
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As you may have seen last week, HMRC has emailed businesses to ask them to print a message on all payslips for the coming year.  They go further and actually presume to tell us exactly what we should print, namely that the “1.25pc uplift in NICs funds NHS, health and social care.”  Companies are not legally obliged to do this, but they are “strongly encouraged’ to do so, according to an HMRC spokesperson.

There will be some (possibly many?) who object to their firm’s payslips being used for what they see as government propaganda. Others, for their own political reasons, will note that the increase breaks a manifesto pledge by the government. Some are threatening to print their own, less than complimentary, messages on their employees’ payslips.  A few are wondering what will be the next messages that we are “strongly encouraged” to print on our payslips?  But all of this misses the bigger point, namely, when is it appropriate, if ever, for government to tell us to promote their own policies? 

People are not daft. We know what taxes are for and most of us know that NIC is just another form of tax.  There is usually no pot of accumulated money to be spent on social care, pensions, etc. – these costs are met out of current government revenue. In this case, the argument is that this 1.25% uplift is, in fact, specifically for one purpose, to wit initially to fund the NHS as it recovers from the trials of Covid, and then subsequently to fund the burgeoning costs of social care as our population ages and there are fewer people of working age to fund all public services.

HMRC is, we thought, supposedly politically neutral. Not many would disagree that the costs of the Covid pandemic need to be met, ideally without inflicting future financial pain on our children and grandchildren.  Yet, with the brutal invasion of Ukraine by Russia almost certain to increase public expenditure and exacerbate the looming cost-of-living crisis, there will be even more demands on the public purse in the months ahead.  This move to print a message effectively supporting government policy seems a totally unnecessary distraction that may cause as much resentment as it will gain support, but in truth we don’t know what the majority view will be.  What do you think?  Will you be happy if your payslip contains this message, or if you are an employer will you be ensuring it’s printed on your employees’ payslips?  Let us know.

Vivian Linstrom, M&S Accountancy & Taxation

 

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