Retailers call for a halt to ‘unreasonable’ HMRC minimum wage enforcement

Photo: Iceland

HM Revenue and Customs should stop its “unreasonable” investigations into breaches of regulations surrounding the national minimum wage according to the British Retail Consortium (BRC).

In a letter to the HMRC, the BRC said it was “inappropriate” for enforcement officers to pursue companies for technical breaches when employers were taking “all reasonable steps to comply”.

The news follows a number of cases where employers have been alleged to be paying under the minimum wage.

Last month, Sir Malcolm Walker, chief executive and founder of Iceland Foods, described to the supermarket’s dispute with the taxman as “madness”. HMRC’s Minimum Wage Enforcement Taskforce has told the supermarket it is breaching pay rules, because the pay of staff who were setting money aside in a voluntary Christmas saving scheme had technically fallen below the statutory pay threshold.

Business secretary Greg Clarke wrote to the BRC in December saying he was considering reform of the “complex” regulations, following reports that retailers had fallen foul of rules concerning uniform policies or salary sacrifice schemes.

He launched a consultation, which closes on 1 March 2019, into proposed changes to the minimum wage rules where employers feel regulations unfairly penalise them, without “generating any benefit or protection for workers” and, specifically, into salary sacrifice schemes, where pay deductions are offered in return for goods or services.

Retail leaders said the taxman was “unreasonable” for continuing to chase businesses while ministers reviewed regulations, and that Sir Jonathan Thompson, chief executive of HMRC, should “reset the relationship” with employers.

According to The Times, Helen Dickinson, chief executive of the BRC, said in the letter: “The regulations, now two decades old, are no longer fit for purpose and it is right they are under review. Against this backdrop, it is unreasonable for HMRC to continue to take enforcement action against those employers who are operating reasonable pay practices designed to support colleagues.”

Earlier this month, the employment appeal tribunal found that Middlesbrough FC did not breach minimum wage legislation after deducting the costs of season tickets from staff wages. According to HMRC, by making such deductions the club was in breach of the National Minimum Wage Act 1998.

HMRC said its enforcment of the minimum wage was “in line with the law”.

Reward, compensation and benefits opportunities


Browse all comp and benefits jobs

13 Responses to Retailers call for a halt to ‘unreasonable’ HMRC minimum wage enforcement

  1. Avatar
    Herbino 19 Feb 2019 at 8:45 am #

    Business have been getting away with high profit margins and its workers earning just about the minimum wage not even the living wage. What sort of a business model puts its staff through misery and then complain to the government about their investigations.
    Pay your staff right then you can sleep knowing you’re doing the right thing for this country.

    • Avatar
      Amy 19 Aug 2019 at 7:14 pm #

      Are you a business owner?
      I am a small salon. I get paid less than any of my staff, to keep up with the NLW.
      I have also just been investigated. I pay everyone over NLW however by the time the HMRC take off products they bought from me, lunches they choose not to take because they haven’t had a client all afternoon, money for uniform, (there isn’t an enforced one but HMRC decided wearing black counts) equipment they buy and use at home too for family and friends’ hair, the times they run over… but not taking into consideration the times they go early… it looks like I’m facing a fine!
      I feel I’ve taken every reasonable step to ensure the team are paid correctly.

      I feel completely harassed, and have staff fearing for their jobs upon the outcome of the investigation.
      This isn’t what it should be like. There should be a time limit to get things correct if in general you are following the rules, not a fear of a £20k per employee looming over your head for months of investigations.

  2. Avatar
    James Martin 19 Feb 2019 at 8:53 am #

    Any self respecting employer should not even consider paying it’s staff the legal minimum anyway. I could never needs any staff member £7.50 for working for me for an hour, it’s utterly disgraceful in this day and age.

  3. Avatar
    Pawan Kumar 19 Feb 2019 at 9:01 am #

    I was paid less than NMW and tips from 12yrs. Complaints to HMRC but no action taken

  4. Avatar
    Danny 19 Feb 2019 at 10:58 am #

    So because the staff decide to voluntarily put money aside for Christmas the employer should have to pay them more, in that case, I’m going to put £9 of my £9.51 wage aside for Christmas savings then complain to HMRC and make my boss pay me another £7 as technically I’ll be getting less than the minimum wage. The law needs to be changed because that’s stupid.

  5. Avatar
    J Edward 19 Feb 2019 at 11:33 am #

    HMRC are corrupt. Big companies get away with it because of MP intervention in HMRC investigation. The whole thing is a Tory farce. Donate to us and get away with it and don’t and we come after you.

  6. Avatar
    Phil brown 19 Feb 2019 at 1:00 pm #

    Iceland are a joke to work for. When I worked there I was doing 10 hour days without a break! The saving scheme for Christmas is totally wrong. You save the money, they get all the interest, so they are making money off the backs of their hard workers!!

  7. Avatar
    tracy stewart 19 Feb 2019 at 1:09 pm #

    My hours have been cut three times to accommodate the minimum wage so I am out of pocket this time £20.00 a week

    • Avatar
      Aidan Malcolm 20 Feb 2019 at 8:17 pm #

      can i use you in my assignment report on the flaws on the increasing minimum wage? many thanks

  8. Avatar
    Jobs worth 19 Feb 2019 at 4:03 pm #

    Just up your skills so your minimum wage is way over £10.. Help yourselves to get ahead of this ridiculous system

  9. Avatar
    Elaine Wright 19 Feb 2019 at 4:40 pm #

    HMRC and HSE don’t want to be bothered investigating any complaints, they turn a blind eye.

  10. Avatar
    Gav 19 Feb 2019 at 6:56 pm #

    Work for the basic minimum wage doing a difficult or hectic job for the minimum (useless) wage and see how great it feels. Yay!!!! We’re working like slaves for what??? To be treated like a slave (I’m only saying this about my job or jobs I have done – I know some are easier).

  11. Avatar
    Mark 20 Feb 2019 at 7:58 am #

    Any reasonable employer should look at employees earnings and hourly rate and only allow them to contribute to any savings scheme an amount which would not allow them to technically drop below the minimum wage, that’s how it works in my company. Any company who does not do this is taking advantage of their workers by allowing them to save more than they can afford and also earning interest off the back of their own employees savings!

Leave a Reply