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National Minimum Wage Advisory

Changes are on the horizon for National Living Wage and National Minimum Wage

Since it was introduced in 1999, the National Minimum Wage (NMW) has been never far from the headlines. With several proposed changes on the horizon, it will remain a key people cost and compliance challenge in the coming years.

The Government has committed to increasing the highest rate of NMW – known as the National Living Wage (NLW) - to £10.50 an hour by 2024. Over that same timeframe, it is also proposing to lower the age threshold for the NLW from 25 years old to 21 years old.

Together these changes will bring many more workers within the ambit of the NLW and at a significantly increased rate. Plus, it comes at a time when the UK business sector is facing a multitude of other people cost pressures.

The compliance environment for National Living Wage and National Minimum Wage

HM Revenue & Customs (HMRC) has stepped-up enforcement of the NLW and NMW in recent years, creating a more challenging compliance environment across all sectors of the economy.

At MHA MacIntyre Hudson, our NLW / NMW Advisory Service can support your business from the very beginning of any review. We can help you take control of the review, putting you on the front foot rather than having to deal reactively to the situation.

Managing compliance

Our many years of experience dealing with NLW / NMW compliance have shown us that HMRC’s view of the facts can differ from the reality of working practices. This view can be challenged if supported by robust internal analysis.

Our specialist team can review the current position of your business and offer practical, real-life insights into how HMRC would see it. This support allows you to get ahead of a review before HMRC get in touch.

In our experience, if you have a number of lower-paid workers, you are likely to be contacted by HMRC, particularly since its enforcement activity has increased. Let us review your current position and offer practical, real-life insights into how HMRC would see it.

Our pragmatic recommendations will ensure your NLW and NMW compliance is on a robust footing.

The focus of HMRC enforcement

HMRC reviews often focus on strict technical breaches of the rules governing NLW and NMW. Employers that believe they are compliant and are fairly paying their workers can still be found non-compliant by HMRC.

An example of this is where staff get changed before they start their shift. Does that count as working time under NLW and NMW? If so, how much time does it actually take employees to get changed before and after shifts?

Our team can offer advice that ensures you understand all areas of compliance.

The financial impact of non-compliance for National Living Wage and National Minimum Wage

The combined financial impact of NLW / NMW arrears and penalties for non-compliance can be significant.

In 2018/19, HMRC recovered arrears across employers in all sectors totalling more than £24m. It can also impose penalties on employers of up to 200% of the total underpayment.

Find out more

Get in touch with a member of our specialist advisory team today to find out how our NLW / NMW review service can help your business to succeed and grow.

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Gordon Thrower

Senior Tax Manager

An employment tax specialist, Gordon started his tax career with HMRC spending 8 years as part of a special investigation unit before moving across the divide to PwC in 1997. He later moved into mid-tier, picking up a “Best Tax Team Award” in 2010 working alongside Chris Blundell at Mazars.

More recently, Gordon has acted as an in-house consultant for a number of businesses, thus gaining experience from all three sides of the HMRC-Advisor-Business triangle. He has worked across a number of sectors, including education, property, IT, retail, banking, public sector and not-for-profit and has extensive experience of handling negotiations with HMRC.

Get in touch with Gordon Thrower

Nigel Morris

Employment Tax Director

Nigel was previously an HMRC Inspector and has worked in the Big 4 for 18 years before joining MHA MacIntyre Hudson in January 2017. His experience includes work on a range of employment tax matters for a range of major national and international businesses as well as SME and OMB businesses. This includes work primarily in the Automotive, Hospitality & Leisure, Logistics and Construction sectors.

Nigel has aided clients in managing employment tax risk and mitigating HMRC settlements, as well as spending a considerable amount of time designing, implementing and communicating arrangements to reduce employment tax cost. He has worked on a large number of car consulting projects, including the development and design of bespoke arrangements for clients, including ECOS, Salary sacrifice and Hybrid fleet arrangements. He is a member of the Association of Taxation Technicians.

Get in touch with Nigel Morris

Richard Maitland

Partner

Richard joined MHA MacIntyre Hudson in 2019 with 18 years of experience in the field of human capital, gained from his roles in the Big 4.

He leads the national employment tax team within our Human Capital Advisory practice, as well as specialising in national minimum wage issues.

Richard has deep experience in the issues faced by employers across the key employment tax areas of payroll, expenses and benefits. He also specialises in employment tax status, an area which continues to present shifting and complex challenges to clients.

Richard helps employers design and implement flexible benefits programmes that support their recruitment and retention agendas. Richard has also worked with clients across the retail, gig economy and business services sectors in the field of national minimum wage compliance.

Get in touch with Richard Maitland

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