6.7 Transfers of resources between people (e.g. gifts, taxes, grants, subsidies or social security payments) should be excluded from the overall estimate of Net Present Social Value (NPSV). Transfers pass purchasing power from one person to another and do not involve the consumption of resources. Transfers benefit the recipient and are a cost to the donor and therefore do not make society as a whole better or worse off.
6.8 Where transfers may have a distributional impact it may be appropriate to quantify and show these effects alongside the estimate of UK NPSV. This could involve showing the transfer of equivalent costs or benefits from one group in society to another, particularly when relevant to distributional objectives. It may be appropriate in those circumstances to undertake distributional analysis as set out in Annex 3.
6.9 Redundancy payments are a transfer payment and should not be part of the estimate of UK NPSV. Redundancy costs (or potential costs) should be included in the calculation of the financial costs to the public sector. In addition, where there are significant wider social effects of redundancy these should be calculated and included.
6.10 Payments of tax and national insurance made from an employee's gross earnings are part of the output or value produced by the workforce. They are therefore not a transfer payment and should be included where relevant in calculations of social value. HM Treasury should be contacted if there is uncertainty about whether costs or benefits in appraisal represent a transfer payment.