HMRC criticised for plans to impose ‘derisory’ 2% pay award

Union dubs department tasked with enforcing National Living Wage ‘morally bankrupt’ for treatment of staff

Photo: HMRC

By Jim.Dunton

09 Aug 2019

HM Revenue & Customs’ proposals to impose annual pay rises of up to 2.08% for its lowest paid staff have been attacked by the Public and Commercial Services Union

The PCS said the tax-collection agency – which is tasked with enforcing firms’ adherence to the National Living Wage – was locked in an “embarrassing spectacle” of having to uprate its own lowest pay band on an annual basis to make sure it complied with the earning minimum set by government.

The union said HMRC had told it that the rise would be paid at the end of next month, fully consolidated and backdated to 1 June, which is the beginning of the department's pay year. It gave a range of 1.86%  to 2.08% for the rises and said the award would be worth from £360 a year for administrative assistants based outside London to £1,410 for grade 6 staff based in the capital.


But in a statement to members, PCS said it was frustrated that HMRC officials had rejected its calls to seek additional capacity to fund pay rises from the Treasury or to distribute the funding supporting the proposed settlement in a way that was more generous to the lowest paid.

“The failure to consider alternatives, or to approach the Treasury for more funds, reinforces the view that the employer is working to an agenda that is not in the interests of our members,” it said.

PCS said it would be convening members’ meetings on pay in September and later in the month would meet outgoing perm sec Sir Jon Thompson for a final time.

“We will press him and his successor for a different approach on pay – an approach that must include securing more funds from the Treasury,” it said.

While the HMRC deal is squarely in line with Cabinet Office pay guidance from June, PCS said it still represented a real-terms pay cut at a time when the inflation as measured by the Consumer Price Index was running at 2% and at 2.9% for the Retail Price Index.

The union said that it calculated that more than 12,000 of HMRC’s 60,000-plus staff would be classed as earning on or close to statutory minimum pay rates by April next year.

“We pressed the employer to take action to confront the ongoing, embarrassing spectacle of the department charged with enforcing the National Living Wage, having to uprate the pay of its own lowest paid staff when the statutory minimum increases every April,” it said.

“Once again HMRC has rejected our demand, preferring to widen the gap between the lowest and highest paid.”

The union said its preferred solution for distributing the funding that underpins HMRC’s preferred package would have given the lowest grades £500 a year or 2%, whichever was greater, while grades above AA-EO would have received a £550 a year or a 1% rise.

PCS said the move would have given more people a higher pay rise and “delivered real progress for the very lowest paid”.

An HMRC spokesperson said the department continued to operate within the limits of affordabilty, worked within the parameters set out in the civil service pay guidance, and complied fully with the rules it was tasked with enforcing on others.

“We recognise the real concerns of our people on pay, that’s why we’re making the case for better pay in the future, working with our trade unions,” they said. 

“We’ve used the full flexibility available to us under the civil service pay guidance for this year, as other departments have across the civil service.”

Responding to PCS’ suggestion that the department had opted for a settlement that did not help the lowest paid as much as it could have, HMRC said it had chosen not to target increases at particular sections of its workforce.

“Higher monetary increases for lower paid colleagues would inevitably have meant smaller increases for others,” the spokesperson said. “In our view, the fairest deal was to give everyone the same percentage increase.”

It said the same value award was payable to everyone in the same pay band, meaning that it was worth approximately 2.08% for people at the bottom of the band and 1.84% for those at the top.

This story was updated at 15:00 on 9 August 2019 to include comments from HMRC

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