The “national living wage” (NLW) was theoretically designed to boost low-paid workers’ income and help people off welfare. However, unsurprisingly some companies have been looking for ways to reduce the cost impact of the NLW.
Step forward ISS, the company that employs the HMRC cleaners in Liverpool.
ISS informed the HMRC cleaners them that it intended to claw back any increase in hourly pay by cutting each worker’s number of hours so that their overall wages stayed the same.
In theory this meant no changes to the take home pay, and a cut in working hours.
So far so good?
Except that single people on low pay who work at least 30 hours a week qualify for working tax credits. These are paid out by HMRC, which is also responsible for enforcing the NLW.
When ISS lopped two hours from their working week, the cleaners fell below the threshold and have, as a result, lost between £40 and £50 a week in tax credit payments each.
Hence the cleaners voted to go on strike for two days this week.
The Guardian notes the irony that ISS is a Danish company contracted by a Mapeley (Mapeley being offshore) offshoot to clean the buildings.
Now, of course, if the cleaners find additional hours in other work they will be able to have their tax credits reinstated. That of course all depends on the local job market.
The question is, if the number of hours cleaning has been reduced do the staff of HMRC who work in those offices notice any difference?
If not, then it seems ISS were overcharging HMRC for work that was not required before the hours were cut. If there is a noticeable decline in office cleanliness, then HMRC need to raise this with ISS.
Tax does have to be taxing.
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