Taxing Stuff,Topical Issues

Are you prepared for a visit from the HMRC “DYNAMIC RESPONSE TEAM”?28 Feb

This year saw a new team from HMRC taking up the fight against rogue employers who refuse to pay their workers the National Minimum Wage. The Team is working on the most high profile and complicated National Minimum Wage cases faced by HMRC, particularly in areas where employers are using migrant labour to undercut competitors by paying below the minimum wage.

Over the last month a number of our clients have received a letter from HMRC requesting a review of their records.

What is the National Minimum Wage ?

The national minimum wage sets minimum hourly rates that employers must pay their workers. From October 2011, the rates have increased to:

• for adults aged over 21 years: £6.08 per hour
• for workers aged 18 to 20 inclusive: £4.98 per hour
• for workers aged under 18 (but above compulsory school age): £3.68 per hour
• for apprentices aged under 19: £2.60 per hour

HMRC are strictly enforcing the above rules and any underpayment will be backdated and penalties will be applied.

What will HMRC need to see ?

You must keep records that show you pay at least the national minimum wage to anyone who works for you and is entitled to it. HMRC compliance officers are entitled to ask you to produce appropriate records for inspection. You are required to keep records for at least three years.

What do I do if I realise I have underpaid an employee ?

If you haven’t paid a worker at least the national minimum wage requirement, then you must work out what’s owed and pay any arrears.

What if HMRC visit and realise I have underpaid and employee ?

IF HMRC finds you have underpaid the national minimum wage it will issue a notice of underpayment, showing the arrears due and a penalty:-
• The penalty can be 50 per cent of the total underpayment.
• There is a minimum penalty of £100 and a maximum of £5,000.
• If you receive a notice of underpayment you have a right of appeal

Don’t Delay review your PAYE records today !!

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