From April 2023, the Health and Social Care Levy will deduct an extra 1.25% from all employees' payslips. However, from next month, as an interim step, national insurance will temporarily rise from 12% to 13.25% for a year.
On behalf of the government, HMRC are clearly concerned that we might not want more taxes deducted from our pay, especially when this will apply to many who can least afford it, so they've asked us to 'spin' it for them.
Per HMRC's "Prepare for the Health and Social Care Levy":
"HMRC is asking employers, where appropriate, to include the following message on payslips:
‘1.25% uplift in NICs funds NHS, health & social care’."
I don't know why the government don't do this with all taxes. When I buy a pair of socks in M&S, I'd like the receipt to say "the VAT on this item has been fully allocated to saving children and puppies". But, when I buy alcohol, it could state "the VAT on this purchase has been used to buy weapons".
So they want us to lie to our employees and pretend that this extra tax has been hypothecated for a nice, cuddly purpose so that we don't complain? I hope that most people are cynical enough to realise that hypothecation is a myth and that all taxes are put into one very large pot and divvied out amongst the various government departments as required.
I thought that the civil service was apolitical, but perhaps not under this government?
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I suppose if you are a Chief Exec angling for a gong you might do it. Otherwise they can go forth ....
I noted this email from HMRC and could not believe they have the audacity to ask for this message to be included. The Employers job is not to explain why taxes are levied . The employer acts as an unpaid tax collector with onerous tax collection duties carrying penalties etc. HMRC can't reply to simple letters , can't collect tax adequately , keep changing the goal post for MTD , can't sort BBL properly , got SEISS Grants complicated causing huge amount of wasted time plus a host of other errors that cause the taxpayer extreme stress and depression. Perhaps something on the payslip about how you can access NHS services to deal with the mental anguish HMRC inflict on innocent people might be more appropriate .
I complained about this when it was first propounded by HMRC shortly after the Budget announcement ... and then wrote to them again a month ago:
"Is there any legal basis for HMRC (a politically unaffiliated member of the Civil Service) to issue this request (or ‘suggestion’ or ‘advice’) – particularly in tones that have led some to believe it is part of your specified compliance?
I understand the practical intention, but can’t help feeling that the whole ‘payslip message’ construct is politically motivated in support of a contentious policy that breaks the government’s pre-election commitment … and is therefore counter to the remit of the Civil Service to remain impartial at all times.
I don’t have an axe to grind on behalf of any particular political party, but am seriously interested in whether this question has been considered – and how the conundrum was deemed to be satisfied.
For the avoidance of doubt, I have no problem with the (as yet not fully specified) H&SCL system requirements once it becomes a brand new discrete levy – or indeed explaining its impact and operation for users of Payroll when launched. But it’s the request, for each payslip to assist in ‘justifying’ a policy, that goes well beyond the usual approach of mere explanation."
And the response?
"As you know HMRC are responsible for the administration and successful delivery of tax policy set by the government. As part of this function, HMRC work in partnership with HMT and ministers on developing and delivering policy, including in connection with the implementation of the NICs rate rise for 2022/2023. A key element of our work is to ensure that all taxpayers are aware of their tax obligations, any changes to tax policies, and the benefits or support available to them and help them understand these and any action they may need to take.
Whilst it is not mandatory, we have asked employers, payroll providers and software developers to help us ensure taxpayer awareness of the Health and Social Care Levy and the implementation of the NICs rate rises for 2022/23 by including the message in payslips from April 2022.
For the Health and Social Care levy from April 2023, when the levy is separated from NI contributions this will be included as a separate deduction so changes to the pay will continue to be visible.
We hope that inclusion of this message, where it is possible, will help taxpayers understand the changes they will see to their pay and not cause any unnecessary confusion or concern, and also reduce the need for customers to contact HMRC by having this information readily available to them."
So, no response let alone justification regarding my point on politicisation of the Civil Service ... and a rather weak plea to help them (HMRC) receive fewer queries!
I have closely guarded channels ... although they are slowly but surely being closed down. It feels a bit like the dimming of lights that used to illuminate our direction!
I saw this email and thought “nyaaa” with a (probably physical) shrug of shoulder deleted it.
Its not mandatory although I imagine a lot of people who run payrolls will think it is and include it to 'be on the safe side' which I guess is why they put it in.
Whilst I only run small directors only payrolls (and largely without payslips, just a P60) if I was running a big one I would not include it as a matter of principle.
The principle being this is government propaganda. I don't get involved in politics when doing my day job.
And if we use legitimate means to reduce a clients tax liability do we have to write and tell them how much they have cost the NHS?
Might just be me, but it seems the clients that moan the most vociferously about the state of this or that (or the country at large) are the same ones who are most averse to paying any tax.
Not sure whether that broad swipe is meant to include me (or more importantly my complaint as set out above in a lengthy post) ... but surely there is little correlation between my reminder to HMRC (that their recommended action runs counter to the remit of the Civil Service to remain politically impartial at all times) and any desire or aversion that affects the amount of tax I pay?
No swipe at anyone intended. I fail to see how you could have taken it personally even if I was swiping.
A disconnect has appeared in people's thinking between tax and government spending. I don't see why it falls to HMRC to close the gap, but I don't share Paul's outrage that they try.
When one gets one's council tax bill, one is provided with a reminder of the type of thing it is spent on.
Not to worry ... I've not suddenly developed a sensitive skin!
Just my clumsy way of trying to draw a distinction between valid moaning (at which I'm hoping to rise to a post-doctoral level by practicing on this site), and a dislike of paying tax (which I regard as a necessary evil - laying emphasis on the adjective)!
FWIW I too have no issue with HMRC trying (and they are .. very!) to collect taxes, but I'm shall we say wary of the insidious manner in which they're seeking to broaden their remit beyond operation of the regs (especially without any formal ministerial oversight ). That is however a whole different topic to this one ... which (for me) was all about mission creep into political propaganda.
In my recent experience the clients most averse to paying tax are those employed or married to someone employed in the public sector or in receipt of a public sector pension.
The problem seems to be that when you click on 'Post Reply' it can take up to 15 seconds or more to do anything, so people keep clicking on 'Post Reply' thinking the post is not going through.
Click once, the box will turn blue and then wait until the message is finally posted.
Not so, my other half has the miniscule tax and NI she pays deducted at source but she could still moan for Scotland.
The deputy leader of our Council is about to incur her ire over the state of roads and pavements (they are bad) due to his being:
a. from our constituency, wants our vote in May
b . he stupidly sent us a election leaflet with a tear off part re comments/suggestions (he really ought to have talked to me first as I would have strongly advised he ought not have given her an opportunity to open a dialogue)
Still, at least the manager of Hibs has not asked her for her feedback as that would have removed his skin.
But, when I buy alcohol, it could state "the VAT on this purchase has been used to buy weapons".
Right now, that just sounds like an excuse - "it's my contribution to the war effort".
This email was sent to employers, and our copy was sent to us in that capacity.
We do a number of payrolls, so I assume that the same email has been sent directly to all our client employers as well, but we have heard nothing from any of them. This means that this message will not be included on the hundreds of payslips that we prepare for these particular employers and I guess the same scenario will be reflected right across the country.
That ("this message will not be included on the hundreds of payslips that we prepare") will depend on which Payroll software you are using.
HMRC is trying to get software developers to incorporate the message in ALL payslips (without the option or with only a well-hidden switch to remove it) ... failing which they are *requested* to write to all their employer clients with the 'recommendation' that the message be set-up.
It is that insidious nudge (that reads like a veiled threat) that caused me to send the complaint (as above on this thread) ... with of course no impact!
Like, I suspect, the majority of software developers we've not changed our payslips. The product has always provided a payslip messaging facility for clients to use and we've suggested that any who wish to, should use this for the government's message. We have had a few requests for clarification of HMRC's suggested wording, so some employers are at least considering it.
As you say, the majority of software developers (and certainly the established ones ... take a bow) will not be kowtowing to HMRC's blandishments - if only because it's not in line with our culture to tell clients what to do (when it is but an option).
I've no problem with employers choosing to use a standard facility to circulate a message (it may be to their benefit in reducing the number of queries heading for the Payroll function) ... but my father would have been horrified to see what I perceive as political manipulation of the Civil Service (as indeed was my son from his eyrie in a non-HMRC Whitehall building).
Instead I'm putting the following message on payslips
"all Ni is just a tax , it has the same effect on your disposable income as a tax . They do not call it a tax because they wish to deceive you as to the true marginal rate you pay "
In the letters section of the Daily Telegraph today, someone suggested we put on the payslip:
If we are going to make payslips political, it should note:
"Amoint due to Conservative Manifesto Tax Pledge broken"
That is one way of dealing with a mandatory note on a payslip, but this space is also used for any other messages from the employer so there is nothing to stop the employer adding another message to say that 'we have been forced to add the above message to your payslip but we are not in a position to endorse this message or provide any assurance as to its accuracy'.
I have little doubt it is legal for HMRC to make the request. Section 9 of the Commissioners for Revenue and Customs Act 2005 (Ancillary powers) provides they
"may do anything which they think—
(a) necessary or expedient in connection with the exercise of their functions, or
(b) incidental or conducive to the exercise of their functions."
I submit it is clearly conducive to their functions to seek to minimise the amount of hissing in response to the increased deductions.
As for the fact that neither NI nor the new charges will hypothecated, the text merely asserts that the increased revenue will "fund" certain increases in expenditure. That is a form of words which has a long history. I don't recall anyone previosuly arguing that Chancellors should merely state that a tax increase will "tend to increase total government receipts out of which central government expendituire will be made".
What might be "conducive to their function to seek to minimise the amount of hissing in response to the increased deductions" would be a factual *explanation*.
The phrase proposed (‘1.25% uplift in NICs funds NHS, health & social care’) appears to be an attempted *justification* ... that is neither accurate (the inference of the wording being 100% of the uplift), nor within the remit of an unpoliticised Civil Service.
So, legal? Maybe. But acceptable? No.
A point well made, Charlie Carne, as the Institute for Government endorses at https://www.instituteforgovernment.org.uk/explainers/health-social-care-....
I intend to remain politically neutral and will not add the note to payslips prepared for clients.
I have yet to meet a single employer who has any intention of putting a political message on payslips particularly one that is a) mathematically incorrect as it's not a 1.25% increase, but a 1.25 percentage point increase, the cash increase can range from actually a reduction to an over 16% depending upon the level of earnings b) it is not appropriate because the money is only ring-fenced to fund health and social care in England, it is for the devolved administrations decide what to do with any funding that is passed to them as part of their budget allocation. Any employer that includes this message is likely to get numerous queries in April when individuals find that the cash increase in their national insurance may be way more than 1.25%.
I have yet to meet a single employer who has any intention of putting a political message on payslips particularly one that is a) mathematically incorrect as it's not a 1.25% increase, but a 1.25 percentage point increase, the cash increase can range from actually a reduction to an over 16% depending upon the level of earnings b) it is not appropriate because the money is only ring-fenced to fund health and social care in England, it is for the devolved administrations decide what to do with any funding that is passed to them as part of their budget allocation. Any employer that includes this message is likely to get numerous queries in April when individuals find that the cash increase in their national insurance may be way more than 1.25%.
I run payrolls, as an accountant in practice, for a number of smaller and one person companies, sometimes with a few staff.
I've decided to include a short piece of text and a link on the email enclosing the February and March 2022 payslips to a short blog article on my website. This is to help explain the extra 1.25% to clients and their staff, to avoid a flood of employee/employer questions. It's also good PR.
"Increase in National Insurance from 6 April 2022
The Prime Minister announced on 7 September 2021 a new 1.25% Health and Social Care Levy to fund investment in the NHS, health and social care. We would draw your attention to the increase in National Insurance by 1.25% from 6 April 2022 and the new Health and Social Care from 6 April 2023. We have today published a short summary of how it will affect you."
For the link, see https://www.all-paul.co.uk/post/health-and-social-care-national-insuranc...
I would, like others, not put the message onto payslips.
Personally, I think that the suggested message on the payslip doesn't actually mean anything, unless you understand what's happening., and then you don't need the payslip message.
Clients and their staff will just see extra NIC on payslips and not the levy, not until at least April 2023.
There was a similar thread on LinkedIn.
I will raise this with Moneysoft since it needs to be optional.
HMRC have also added blue and yellow from the Ukrainian flag to their logo. So not apolitical.
https://www.facebook.com/100068802116604/posts/261616442808424/?d=n&subs...
Fair play on the Ukranian flag
Beats the Woke flags
Ukrain is about invasion by a dictator that hates Jews in control and murder of the innocents.
Been there before
Russia joined with Hitler to kill just so many Poles
Nothing learned from the past
If it is a legal obligation, they will tell you to do it but if it is a request, they will ask politely, they may even say " please".
It's not a legal obligation ... but HMRC never use the 'please' word (it is rumoured that a sub-sub-committee has been running non-stop for over 10 years on the topic of whether using 'please' is condescending to those who identify as 'assertive')!