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Accountants take ‘political payslip messaging’ to task

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The government’s request for software developers and employers to add a standard payslip message explaining April’s national insurance hike has received a mixed response from the payroll, tax and accounting professions.

8th Mar 2022
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Experts have also warned that employers choosing to ignore the message may find themselves bypassed if software firms decide to universally push it through by 'hard-coding' it into the payslip message field.

With the first payslips containing an increase in national insurance contributions due to land next month, the government has repeatedly asked employers to include messaging about the rise “to ensure taxpayers understand that their increased contribution is helping fund public services”.

According to HMRC’s latest Employer Bulletin, the message should read “1.25% uplift in NICs funds NHS, health & social care” - a statement which itself has attracted criticism for its accuracy around the use of the term ‘uplift’ in relation to the percentage point increase.

The request is not mandatory and employers will not face sanctions for leaving the message off payslips. HMRC has asked for the wording to appear on all employee payslips until 5 April 2023, when the new health and social care levy applies.

Supporters of the move point to a need to communicate the change rather than saddling payroll departments or finance teams with a raft of employee questions on the issue.

A CIPP spokesperson told AccountingWEB that they welcomed HMRC’s payslip message. “Communication will be key to help alleviate some of the pressure on payroll teams and preventing an influx of queries on the topic,” they commented. “So much we talk about in the world of payroll centres on effective communication, and this is one of those areas where communication is key.”

While messaging about a new tax or national insurance rise appearing directly on payslips is unprecedented, HMRC points to the increased transparency provided by similar initiatives, such as the introduction in 2014 of the Annual Tax Summary, which breaks down exactly how their tax is spent by the Exchequer.

Care and management of the tax system?

However, critics of the message have declared it a blunt instrument that falls outside of the usual remit for a non-ministerial department such as HMRC. 

The Revenue’s former Executive Chair and First Permanent Secretary Edward Troup took to Twitter to voice his (polite) disagreement with the request. “HMRC asking employers to push the political narrative for a tax rise,” he stated. “Are we sure this falls within HMRC’s legal powers for ‘care and management of the tax system?”

 

 

Nimesh Shah, CEO at accounting firm Blick Rothenberg went slightly further with his criticism: “This feels like government propaganda to justify the NIC increase at a time when there are huge pressures on working families

“The government has instructed HMRC to do this because they will be concerned this will be viewed as a direct tax increase,” continued Shah.”It’s an underhand tactic from HMRC to direct employers to do this – the fact is this is an increase to NIC which will impact both employers and workers, and employers have no legal obligation to do this.”

Dan Neidle, tax partner at law firm Clifford Chance, commented that asking employers to include political messaging in payslips to try to "sell" the NICs increase to employees was “unprecedented and improper”. Writing on LinkedIn, Neidle said the move appears designed to “bolster the popularity” of the increase. “That's politics,” he added, “and HMRC shouldn't be part of it.”

Responding to accusations that the request strays outside its remit, HMRC stated that the message is designed to provide entirely factual information to let employees know about the rise and nothing more.

“We strongly encourage employers to do this where they are able to, but it is not a mandatory requirement,” an HMRC spokesperson told AccountingWEB. “From 2023-24 the health and social care levy must be shown as a separate deduction from pay for all employees.”

Potential hard-coding issues for payroll vendors?

HMRC has contacted payroll software providers separately to ask that they include this messaging in their software.

This has raised concerns in the payroll community that it could be ‘hard coded’ into payslips, with the potential for confusion if the department, bureau or firm is running a pensions payroll for example where no NICs are payable.

Writing in February 2021 AccountingWEB Software Award-winning payroll vendor BrightPay said the message will be automatically added to the payslips of affected employees, but users will have the ability to remove the message if they wish, while payroll provider Moorepay has also confirmed they will add it.

Employers use payslips in a variety of ways to let employees know about employment-related matters, such as who to contact in the event of a query, raise specific departmental issues or simply to wish their staff a happy Christmas. Ian Holloway, payroll consultant for i-Realise, commented that if software developers mandate the message and employers accept it, employers will no longer be able to use the facility for employment-related issues as the HMRC note takes up 52 of the 54 characters in a standard payslip message field.

“I would advise employers to contact their software developers in the first instance to ascertain their plans for this message,” commented Holloway. “At the very least, it should be an option that an employer can choose.”

Hear more about the new health and social care levy in AccountingWEB’s Any Answers Live webinar: Prepare for the start of the new tax year. The interactive session starts at 9am on Monday 14 March 2022, with the chance to watch on demand shortly after the webinar has finished.

Replies (101)

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By User deleted
08th Mar 2022 18:20

I resented the government forcing tax advisers to write to clients with international issues and read them the riot act in a prescribed form of words. An absolute liberty telling me to write to my clients and what to say.

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Replying to User deleted:
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By RyanTheBeanCounter
09th Mar 2022 08:19

Though you did it anyway?

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Replying to User deleted:
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By matthewleitch
09th Mar 2022 11:16

On the other hand, they saved you the bother of having to work out the wording yourself.

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Replying to matthewleitch:
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By Paul Crowley
09th Mar 2022 21:07

No wording needed
The NI has increased

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Replying to matthewleitch:
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By Paul Crowley
12th Mar 2022 19:33

Wow
34 comments on just one article
You are putin us all to shame

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By Hugo Fair
08th Mar 2022 18:51

"Experts have also warned that employers choosing to ignore the message may find themselves bypassed if software firms decide to universally push it through".
Really? Which experts?

And if Brightpay are going to 'force it' on their users, then they'll probably be in a minority of one. Certainly all the big Payroll systems & service providers are providing the facility - but none that I can find are even recommending it let alone enforcing it. Indeed most are going out of their way to make it clear to clients (a) what HMRC have requested and (b) why they disagree with that!

It is a disgraceful attempt to politicise a branch of the Civil Service and to get employers to promote a govt policy with which many don't agree (indeed breaks this govt's election promises).

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By Hugo Fair
08th Mar 2022 19:00

I wonder how long before the British dislike of unnecessarily being told what to do kicks in:

"Extra deduction breaks manifesto promise by this govt"

would fit the bill (and the character count)!

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Replying to Hugo Fair:
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By RickyRoark
08th Mar 2022 20:10

Not long, it's been kicking in for a while.

First with Brexit and more recently with Covid-19, a lot of everyday Britons are realising that their values are not aligned with the political class.

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Replying to Hugo Fair:
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By Rgab1947
09th Mar 2022 09:58

If software houses bypass my decision not to include political messages a la Putin's Russia then I would add that statement.

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Replying to Rgab1947:
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By matthewleitch
09th Mar 2022 11:20

This is not the same as Putin's Russia. Not even close. It's an incredibly mild reminder of what the tax is supposed to be for. In Putin's Russia the messaging includes the idea that NATO is planning to invade Russia and that Ukraine is run by neo-[***] thugs who are trying to exterminate Russian speaking people in Ukraine.

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Replying to matthewleitch:
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By Hugo Fair
09th Mar 2022 14:51

You may have inadvertently put your finger on it ... when you say "reminder of what the tax is supposed to be for".

It is in fact an attempt to mislead taxpayers by suggesting what the tax is for, when there is no mechanism either to ensure it is what happens (or even to monitor the degree to which it does or doesn't happen).

'Supposed to be for' is another way of saying 'claimed', so is at best just propaganda.

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Replying to Hugo Fair:
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By matthewleitch
09th Mar 2022 15:07

It was not inadvertent. I wrote 'supposed to be for' deliberately.

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Replying to matthewleitch:
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By Rgab1947
10th Mar 2022 11:16

Putin tells organisations what to say and when to say it. Work it out.

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Replying to Rgab1947:
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By matthewleitch
10th Mar 2022 12:15

Putin, not his tax collectors.
Tells them what to say, not requests it.

This is fundamentally different just on those points. If we add other points, such as the significance of the issue (e.g. progress of his war vs intention behind a small tax rise), the threats made to ensure compliance (e.g. prison sentences vs none), we can see how very different this is.

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Replying to Hugo Fair:
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By More unearned luck
10th Mar 2022 12:27

The promise or 'guarantee' as it is called in the manifesto is Boris's personal one, made almost immediately above a facsimile of his signature.

https://www.conservatives.com/our-plan

So, I suggest a slight change in wording: replace 'this govt' with 'Boris'.

It is interesting to compare the reaction of this broken promise with that to the Lib Dems 2010 manifesto over student loans (the 'repayments' of which are in reality a tax).

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Replying to More unearned luck:
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By matthewleitch
10th Mar 2022 13:12

The BBC cover that Lib Dem story here:

https://www.bbc.co.uk/news/uk-politics-19646731

Clegg apologised and resolved not to make a pledge without knowing very clearly how it might be kept.

An important difference in the case of taxes now is probably the pandemic, which was not anticipated at the time of the last election and is a very unusual and extreme event. Many, many plans made before it happened will have been modified or completely abandoned by people all over the world.

I am a bit of an expert on ways to manage risk (2 books, dozens of articles, university lectures, etc) so of course I don't think those 'guarantees' were a good idea and I could suggest various ways to do better. However, I'm not going to pour scorn on this example because it's such a typical piece of human behaviour.

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By norstar
09th Mar 2022 09:34

My message might say "1.25% uplift to plug the holes left by Rishi's reckless handouts - sorry you didn't benefit!".

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By Nebs
09th Mar 2022 09:41

I'm not too keen on the message, but the idea is a great one. My preferred message would be: Don't hold your breath if you write to HMRC, they can take over 6 months to reply to a letter.

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By NeilW
09th Mar 2022 09:47

Of course it's a direct tax increase. And the purpose of taxes is to stop the private sector hiring as many people so the public sector can hire them. Do politicians really think we're so stupid we fall for their tricks?

There hasn't been a direct link between taxes and what government spends since the Consolidated Fund was formed in 1787. Even the National Insurance Fund is a chimera as a cursory glance over the accounts shows - it is topped up from the Consolidated Fund if it drops short and dematerialised into it via the actions of the DMO.

Trying to use Tax Salience as the mechanism to control government spending, and recruit accountants into the PsyOps behind it is beyond the pale. It's the job of MPs in Parliament to scrutinise the government's request for money and object to them if they are excessive. Perhaps they should start doing what they are paid to do.

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Replying to NeilW:
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By philaccountant
09th Mar 2022 10:26

They are paid to toe the party line, that's how you get to be selected to be an MP. Any tenuous link to serving their constituents needs is coincidental. Especially in a safe seat.

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Replying to NeilW:
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By matthewleitch
09th Mar 2022 11:25

Tax has several well-recognized purposes, and shifting employment from private to public sector is just the consequence of one of them. A large proportion of tax money is simply redistributed to citizens or spent on goods and services provided by private companies.

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By Ralph-gab
09th Mar 2022 09:49

"Unprecedented and improper" is a very polite way of describing this blatant politicising of HMRC. If they force it into our software we will be adding our own message. There are ways they could have financed this which would not have hit the lower paid.

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By Richard Grant
09th Mar 2022 09:49

A tax rise is simply a tax rise, it's up to the government to explain it and justify it. If they can't to the satisfaction of the public then they should revere it, pathetic stunts like this won't stop it being what it is, another tax.

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Replying to Richard Grant:
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By matthewleitch
09th Mar 2022 11:27

Taxes are not inherently a bad thing but many people act as if they are and grumble about paying tax and tax collection. HMRC has delegated some tax collection to employers (via PAYE) so perhaps the civil servants would also like to delegate explanation of the reason for the tax.

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Replying to matthewleitch:
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By Hugo Fair
09th Mar 2022 11:53

No idea why you've taken it upon yourself to defend HMRC so vociferously (7 times so far on this thread), but "HMRC has delegated some tax collection to employers" says it all from HMRC's perspective (and possibly yours?)!

To delegate = to entrust (a task or responsibility) to another person, typically one who is less senior than oneself.

What happened to the infamous use of 'customer' in this unequal master/servant relationship?

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By Willaja
09th Mar 2022 09:54

What about the crass message on the SA100 exhorting the self employed to “Save what you can for your retirement.” What business is that of a tax collector?

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By DavidAWilks
09th Mar 2022 09:55

I DON'T B----Y THINK SO.

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By Paul Crowley
09th Mar 2022 10:10

Since when has an increase in tax need to be explained at all?

CIPP let down by thier representative.

They wanted to comment lauding the HMRC request but the person wanted to remain anonomous.
Better for their reputation that they were not mentioned

Seriously Tom "an unamed source at......"sounds a bit like a secret revelation. If CIPP will not put a name to the comment then their opinion should not be here.

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By matthewleitch
09th Mar 2022 10:08

This article stokes annoyance in a couple of ways:

1) The heading "Accountants take ‘political payslip messaging’ to task" should really be "Some accounts complain about payslip messaging request". This would have made it clear that this is not the position of 'accountants' generally and that the messaging is only a request with suggested wording, not a requirement.

2) The wording "Experts have also warned that employers choosing to ignore the message may find themselves bypassed if software firms decide to universally push it through by 'hard-coding' it into the payslip message field." creates the impression of something seriously negative and being forced on people. Who are these experts? Why would anyone really care about this instantly forgettable message, let alone have such strong objections that they would have to have it 'pushed' on them?

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Replying to matthewleitch:
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By Paul Crowley
09th Mar 2022 10:22

https://www.accountingweb.co.uk/any-answers/hmrc-asks-employers-to-act-a...

You may like the message
Responders that engage with any answers do not

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By Agutter Accounts
09th Mar 2022 10:10

There has been misleading messaging regarding the NI rise. The rate may be up 1.25% but the increase, as Martin Lewis has pointed out is 10.4%.

I make a point of not discussing political topics with clients. As far as I am concerned, NI is deducted from wages like any other deduction. What the government uses for it must justify by its own means, not because of what is on a payslip.

As I tell my clients in respect of HMRC, I work for them, and NOT for the taxman or his political masters.

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Replying to Agutter Accounts:
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By Paul Crowley
09th Mar 2022 10:27

A more honest message would indeed be 10.4% increase
Trouble is NI comes in so many different rates to start with

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Replying to Paul Crowley:
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By Agutter Accounts
09th Mar 2022 10:34

Put bluntly, NI has lost any purpose it might once have had in respect of an "insurance" which was Lloyd George's initial intention a century ago. It is now effectively just another tax with too many different rates.

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Replying to Paul Crowley:
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By matthewleitch
09th Mar 2022 10:41

It's about 10% of 10%, so about 1% of the more relevant quantity - the relevant income.

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Replying to matthewleitch:
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By Paul Crowley
09th Mar 2022 21:23

Not when over £50,000
Please understand the NI figures base rates first
1.25% increase on 2% is: well more than 50% increase on the liability previosly paid

10%: so such liability exists
NI is: 2% 5.85% 9% 12% 13.8%
Take your pick

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By User deleted
09th Mar 2022 10:22

Name the "experts", Tom.

Or, like all content writers (I wouldn't call any of you journalists) do you just throw the word around hyperbolically to support throw away comments made by any old person or to justify writing something you thought up and wrote to harvest comments?

Either way, content writers should find a new device. Over the past 2 years, the public has probably learned to read "experts say" and suspect that it is made up and/or the opposite is true.

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Replying to User deleted:
Tom Herbert
By Tom Herbert
09th Mar 2022 13:47

The journalist comment is unnecessary and obnoxious. If someone is willing to pay me to be a journalist, then that's what I am - similar to the term accountant in this country.

As a journalist, I speak to a variety of sources from around the profession to make sure what I'm writing is accurate. Perhaps unsurprisingly, the payroll professionals I spoke to about their concerns weren't happy to have their names attached to the piece for a couple of reasons. Firstly for fear of blowback from the working groups or professional bodies of which they're a part. And secondly, because they didn't fancy having their reputations pulled apart in the comments section, their firms or company accounts looked up and commented on and, as has happened in some cases, being contacted and insulted outside the AWeb arena.

I've not used the 'experts' device lightly - perhaps there are better ways of phrasing it - but I'd rather do this than not flag an issue like this to AccountingWEB readers.

Looking forward to engaging more constructively in future.

All the best,

Tom

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Replying to TomHerbert:
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By matthewleitch
09th Mar 2022 14:04

I thought your piece was written in a way that would provoke outrage. It may be just that you used journalistic cliches that have that effect without actually intending to get people pumped up. However, you did use them and could have reported in a more neutral and informative way.

'Experts' probably means one person who actually used those words or something like them. It seems very unlikely that more than one expressed those exact sentiments in that form.

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Replying to TomHerbert:
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By Paul Crowley
09th Mar 2022 21:31

Tom
To say anyone who gets paid for a bit of bookkeeping is an accountant on a site dedicated to accountants is very bold indeed

Rather you than me make such a claim
I am an accountant because I am a member of ICAEW, whether I get paid or not. I will still be an accountant by qualifying as a Chartered accountant even were I to retire and get no money at all.

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By matthewleitch
09th Mar 2022 10:47

Is this really political, or is it something that civil servants who collect tax would like to say? Do they get fed up with people treating them as bad guys when what they really do is collect money, according to the rules, to fund schemes for collective betterment. When they collect money directly (e.g. through self assessment) they have the opportunity to remind people why the tax must be collected at all. When collection is delegated via PAYE, they are perhaps tempted to delegate the explanation too.

As so often, 'government' is a term whose meaning shifts too often to be used safely. Sometimes it just means Ministers. Sometimes it means the whole machinery off the public sector, including all those civil servants. Ministers do politics, but the civil service is supposed not to - though of course individuals do.

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Replying to matthewleitch:
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By justsotax
09th Mar 2022 12:09

Given the government promised not to raise taxes, it seems they are trying to justify their actions.

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Replying to justsotax:
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By matthewleitch
09th Mar 2022 13:55

You mean ministers (actually Boris Johnson) promised not to raise tax rates. Presumably their plan with this was originally to add a new tax (thus dodging the rash guarantee) but somehow this turned into changing the NI rate for a year and then creating a new tax. Maybe this is because someone else complained that more time would be needed.

It's a mess that goes back to making rash promises, and then there being a pandemic, and then people (civil service?) complicating what was already going to add complication. This is not new for politics of course.

What we really need is major tax simplification and a shift to tax things a bit differently while keeping the overall tax take and rough distribution about the same. What we are actually getting is more types of tax and more complexity.

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Replying to matthewleitch:
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By Hugo Fair
09th Mar 2022 14:42

Actually "the government promised not to raise taxes" is not untrue.

A government is formed by the political party that wins a general election (unless there is no overall majority and other possibilities that don't apply in this case) ... and that political party will have campaigned off the back of a Manifesto (which in this case contained that commitment / promise).

So it was not "ministers (actually Boris Johnson)" who made the promise in the sense that you portray ... indeed the commitment would remain in place until a new general election (even if, for instance, was Boris was replaced as leader by the Tory party).

Besides you might just as well say that HMRC aren't bound by anything that Jim Harra announces (which is an idea that probably has its supporters in Whitehall)!

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Replying to Hugo Fair:
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By matthewleitch
09th Mar 2022 14:58

I was trying to make the point that 'the government' is used in two very different senses and one is the government you mentioned (formed by politicians after a general election) and the other is just about the whole public sector, including a lot of civil servants. The politicians sometimes get blamed for things messed up by civil servants and vice versa.

To be precise, the 'guarantee' was in the manifesto and signed by Mr Johnson, so it was a kind of promise made by the Conservative Party, which strictly speaking is not either sense of 'the government'.

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By lowprofile
09th Mar 2022 11:02

are we allowed to put our own 'political' messages on clients payslips?
tempted to...

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Replying to lowprofile:
By Nick Graves
09th Mar 2022 11:58

lowprofile wrote:

are we allowed to put our own 'political' messages on clients payslips?
tempted to...

Don't worry - they will soon be doing those for you:

WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH

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Replying to Nick Graves:
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By Hugo Fair
09th Mar 2022 12:05

Or, well .. you might say.

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Replying to Nick Graves:
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By matthewleitch
09th Mar 2022 12:34

These are blatantly self-contradictory claims taken from a work of fiction.

The actual wording that HMRC requested was a very mild reminder of the purpose of the tax.

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Replying to matthewleitch:
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By dwgw
09th Mar 2022 15:21

The extent to which you've defended this 'initiative' makes me think you might be a Tory MP moonlighting on here!

It isn't HMRC's business to justify a tax increase (or decrease). This is a naked politicisation of what should be a neutral civil service.

To then ask payroll providers to act as agents in disseminating such propaganda (and it isn't simply 'information' because national insurance is not hypothecated) should be unacceptable to anyone with integrity, unless they actually want to be PR agents of government, of course.

If an employee has a question, why not suggest they ask their MP for an explanation? That's their job, after all.

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Replying to dwgw:
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By matthewleitch
09th Mar 2022 15:38

I am not an MP or even a political party member. Mostly I have been commenting against exaggerated and unreasonable claims. For example, someone suggested that this request by HMRC is basically the same as Putin's Russia. Obviously that's a colossal exaggeration.

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