HMRC Targets SME Payroll in Minimum Wage Campaign
Herts-based employers are to be targeted as HMRC targets small and medium-sized businesses (SMEs) not adhering to minimum wage rules.
The government is keen to ensure employers understand and apply the complex rules regarding national minimum wage (NMW). Having previously concentrated on large businesses and specific sectors, HMRC’s attention has now turned to SMEs.
Over £27 million has been committed to targeting and liaising with businesses to tackle NMW non-compliance. This includes offering a heath-check meeting to clarify the rules and ensure compliant procedures.
Regional enforcement is involved with HMRC’s Watford team being one of 11 areas proactively involved in the crackdown. The targeted regions are selected based on:
- data suggesting a larger volume of workers potentially receiving wages below the NMW rate, and
- intelligence collected including worker complaints in the region.
Non-compliant businesses will be ordered to pay NMW arrears to workers in addition to increased National Insurance contributions (NICs). As well as risking financial penalties, those breaking NMW rules may be publicly named and shamed.
AccountingWEB explains: ‘To maintain NMW compliance, employers need to consider the so-called five pillars: entitlement, worker type, working time, payment and deductions, and record keeping, policies and control mechanisms.
‘As an employer, only if you understand each of these and have policies in place to govern and control each, can you mitigate the risk (as far as possible) of a potential NMW underpayment arising.’
The current NMW rates are:
- Age 21 or over (National Living Wage) – £11.44
- Age 18 to 20 – £8.60
- Under 18 – £6.40
- Apprentice – £6.40
Each apprentice is entitled to be paid at least the apprentice rate if they are aged:
- under 19, or
- 19 or over, and in the first year of your current apprenticeship agreement
Trina Haggerty of Hargreaves Owen Chartered Certified Accountants adds: ’It’s essential to know how much employees should be paid. However, attention will go beyond rate of pay as NMW legislation has many facets and is commonly misunderstood. While a lot of our clients are based near Baldock, Hitchin and Letchworth, we work nationally, including some of the areas involved with the campaign. It’s reassuring for our clients to know their payroll systems are compliant, accurate and timely, especially if HMRC contacts them.’
To discuss your payroll requirements and find out more about NMW compliance, contact the friendly team at Hargreaves Owen. Enjoy an initial discussion without obligation or cost, just expert pointers and advice.