Ministers face backlash after attempting to rope in businesses to justify NI hike

Ministers face a furious backlash after attempting to rope in businesses to justify the hated national insurance tax hike.

In a move dubbed ‘payslip propaganda’ by hotelier Sir Rocco Forte, tax officials at HM Revenue & Customs have asked firms to add a note to employees’ payslips explaining the increase is to fund public services.

The rise in national insurance contributions (NICs) came into force yesterday, adding 1.25p in a pound to the bill paid by employees and employers.

‘Payslip propaganda’: HMRC has written to firms asking them to put a message on slips to say the uplift is for ‘NHS, health and social care’

HMRC has written to firms asking them put a message on slips saying: ‘1.25pc uplift in NICs funds NHS, health & social care.’

The move has sparked outrage. Clive Watson, chairman of the City Pub Group, which employs around 900 staff, said: ‘We certainly wouldn’t add a note to pay slips.

‘It’s the Government’s job to explain its tax rises – definitely not ours. Don’t let us appease their guilt.’

He said it was ‘disingenuous’ for the Government to imply that all the money would be used to improve the NHS and social care services, since a large chunk would pay for higher costs as inflation rockets.

Julian Metcalfe, chief executive of sushi chain Itsu, said: ‘If we were asked to do this, we would take the request with a pinch of salt.’

The Federation of Small Businesses’ chief of external affairs Craig Beaumont said: ‘With an increasing tax burden, energy costs and inflation rising fast, the last thing small businesses want is HMRC demands to print government spin on payslips.

‘Can HMRC not leave small businesses alone for once?’

Institute of Directors’ chief economist Kitty Ussher said: ‘We know that firms are having to raise prices and hire less people as a result of the decision to push ahead with this jobs tax.

‘To then ask those same firms to do the Government’s job of trying to sell it, when staff are facing higher bills, frankly smacks of desperation.

‘But whatever words they use won’t get away from the fact that this is a flat tax on employing people.’

In the Mail on Sunday, hotelier Sir Rocco Forte wrote: ‘It is completely outrageous that the Government is telling employers to act as its propaganda merchants over an unjustifiable tax rise.

‘We certainly will not be complying.’

The Government said it ‘strongly encourages’ adding the message to payslips to ‘help employees understand the changes they will see to their contributions’.