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.