HMRC has asked employers to print the reasoning behind the forthcoming National Insurance Contributions increase on workers’ payslips. The suggested wording is “1.25% uplift in NICs funds NHS, health and social care.”
The request has resulted in an outcry with many people believing it is fundamentally wrong, unprecedented and improper for businesses to include political messaging in payslips. Furthermore, the request has no legal force.
As a reminder, NICs are increasing from April 2022, as announced by the Prime Minister in September 2021 in order to “pay for the impact of the coronavirus pandemic on the NHS and to address the long-standing funding gap for health and social care.”
However, the rise in NICs breaks the Conservative’s manifesto pledge on raising taxes.
Craig Beaumont of the Federation of Small Businesses said it was not employers’ job to explain or justify spending decisions, commenting: “Taking away people’s pay rises during a cost-of-living crisis is bad enough, but then having the state instruct firms to write PR on payslips just adds insult to injury.”
Kitty Ussher of the Institute of Directors called the move an “odd initiative” that was clearly attempting to justify a “deeply unpopular and regressive tax on jobs.”
A HMRC spokesperson said it was not mandatory for employers to include the message but added they had been “strongly encouraged” to do so.
If you’re an umbrella worker, don’t forget to check if your assignment rate is increasing due to the NICs increase, otherwise you face a double-whamming of both the employees and employers’ increase being funded by your contract rate. See our earlier article for more information.