Wednesday, October 20, 2021

National Insurance bill could be too much for cleaners and other workers

Service workers across Britain, including cleaners, road cleaners and care workers, could be hit with hefty tax bills when they are next issued with their national insurance statistics. Unions and experts said figures due out next year would make the unexpected requirement for both employer and employee to pay national insurance – a step now taken only by a minority of low-paid workers – far more taxing for them. The

National Audit Office (NAO) has identified the statisticians at HM Revenue & Customs, HM officials, Nurofen-maker Reckitt Benckiser and the maker of St Ives Green Tea and Nurofen Children’s as those it has highlighted for the controversial changes, which have been compared to red tape. Despite opposition from unions, HMRC has been pushing forward with new rules which take effect on 1 January 2020. They will affect

anyone on a minimum wage of less than £9.15 an hour, or £11.40 for those over 21. But it will be so expensive to obtain your information about employment and national insurance contributions that some of these organisations could potentially struggle. Nurofen workers for example have to mail it in and individuals do not send in a form at all. The burden of this change for some workers could be immense. HMRC estimates

that for cleaners on a minimum wage of £7.60 per hour, the bill for national insurance this financial year would be £250, equivalent to £25 per hour of working time. There is also the additional need to report to HMRC at least once a year. If they exceed their means, then they will have to pay additional tax, from next April. Anyone who has been unfairly removed from the scheme will have to pay the revenue £100,000

in compensation. Clive Maxwell, head of union relations at Nurofen, which has 20,000 workers, said: “Everyone who works at Nurofen is very happy with the company and the staff are very positive about everything we offer. So we are very sad to see the changes because the changes will affect us all. We don’t want our employees to be confused with something they can’t manage and will cause them considerable hardship.”

Martin Clarke, head of workers’ share options at Reckitt Benckiser, said: “We have not raised concerns but we have advised our employees to check their NUJ National Union of Journalists (NUJ) file … Our intention is to minimise the impact of the changes as much as possible for our employees.” Trade unions said the changes would introduce unnecessary and unwarranted financial hardship on a large number of workers

whose hours are constantly reduced to meet their low pay. Michael Ravallion, a director at Southwark, Southwark and Woolwich PCS branch, said: “We are absolutely against this change. It represents a huge hit on the lower paid; it’s even worse if people earn too much money and they have to write a tax bill which is three times their amount.” Dave Prentis, general secretary of Unison, which represents thousands of care

and cleaning workers across Britain, said: “These changes, as you’d expect from an HMRC which has been cut to the bone and really scraping the barrel, are completely unnecessary and punitive. “They punish millions of service workers who have suffered a pay cut when the economy has started to recover from the financial crisis.” John McDonnell, Labour’s shadow chancellor, said: “Of all the government’s penny-pinching

austerity measures, this seems to be the most unjust. “HMRC could have banned the use of self-employed workers and brought the same changes in via a means test where no one was exempt from paying National Insurance contributions.” Some employees are also putting pressure on employers to pay the new system because it is becoming increasingly clear that HMRC cannot track what they are doing on a day-to-day basis. HMRC

told the Guardian: “We are constantly monitoring employers and have so far written to a few national organisations to remind them that this new change needs to be implemented from 1 January 2020.”

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