National Minimum Wage: HMRC Naming and shaming list

Last week HMRC released its first ‘naming and shaming’ list since December 2021.  It is thought that HMRC will start to release these lists more regularly, which we see as an indicator that National Minimum Wage (NMW) enforcement is being ramped up.

More than 200 employers were named for breaching the minimum wage, with 63,000 workers being affected. Employers being named ranged from major high street brands to small businesses and sole traders. Interestingly for the public sector, a number of schools are on the list, highlighting the importance for education authorities to keep on top of their NMW compliance for this sector.

The businesses named were from investigations by HMRC that concluded between 2017 and 2019, and no doubt started several years prior, as these investigations can often take at least two years to conclude. In addition to the naming and shaming, HMRC imposes a penalty of up to 200% on any arrears and looks back over 6 years, so an NMW audit is something to be avoided at all costs.

HMRC’s stance is that whilst not all minimum wage underpayments are intentional, there is no excuse for underpaying workers, and they will actively pursue all underpayment cases even if it actually causes the worker to be worse off i.e. salary sacrifice schemes.

HMRC Minimum Wage Case Breaches

The following details the minimum wage case breaches identified for employers named for minimum wage underpayment in Round 19. The list does not detail the circumstances which lead to a breach of the rules (such as an employer making a genuine mistake) but it does provide the reasons for the underpayment which were as follows:

  1. 39% of employers deducted too much pay from workers’ wages;
  2. 39% of employers failed to pay workers for working time; and
  3. 21% of employers paid the incorrect apprenticeship rate.

As an employer, it is your responsibility to ensure that the NMW is paid to all employees.

Don’t risk being on the list

PSTAX would be happy to arrange a call to discuss how we can support you regarding the most common areas of error and help you self-correct and avoid appearing on any future naming and shaming lists.

Contact us for a free consultation 

HMRC List

Mae Kennedy

Written by Mae Kennedy

Mae started her career in tax with BDO in Glasgow after graduating from the University of Strathclyde where she studied for a joint honours degree in Business Law and Finance. Mae has worked in tax since 2005, across both industry and practice and is fully CTA and ATT qualified.

View all by Mae Kennedy