British Retail Consortium fight against ‘unreasonable’ fines by HMRC.

Apr 19, 2019

HM Revenue and Customs should stop its “unreasonable” investigations into breaches of regulations surrounding the national minimum wage according to the British Retail Consortium (BRC).

In a letter to the HMRC, the BRC said it was “inappropriate” for enforcement officers to pursue companies for technical breaches when employers were taking “all reasonable steps to comply”.

The news follows a number of cases where employers have been alleged to be paying under the minimum wage. Last month, Sir Malcolm Walker, chief executive and founder of Iceland Foods, described to the supermarket’s dispute with the taxman as “madness”. HMRC’s Minimum Wage Enforcement Taskforce has told the supermarket it is breaching pay rules, because the pay of staff who were setting money aside in a voluntary Christmas saving scheme had technically fallen below the statutory pay threshold.

Business secretary Greg Clarke wrote to the BRC in December saying he was considering reform of the “complex” regulations, following reports that retailers had fallen foul of rules concerning uniform policies or salary sacrifice schemes.

He launched a business consultation, which closes on 1 March 2019, into proposed changes to the minimum wage rules where employers feel regulations unfairly penalise them, without “generating any benefit or protection for workers” and, specifically, into salary sacrifice schemes, where pay deductions are offered in return for goods or services.

Retail leaders said the taxman was “unreasonable” for continuing to chase businesses while ministers reviewed regulations, and that Sir Jonathan Thompson, chief executive of HMRC, should “reset the relationship” with employers.

According to The Times, Helen Dickinson, chief executive of the BRC, said in the letter: “The regulations, now two decades old, are no longer fit for purpose and it is right they are under review. Against this backdrop, it is unreasonable for HMRC to continue to take enforcement action against those employers who are operating reasonable pay practices designed to support colleagues.”

Earlier this month, the employment appeal tribunal found that Middlesbrough FC did not breach minimum wage legislation after deducting the costs of season tickets from staff wages. According to HMRC, by making such deductions the club was in breach of the National Minimum Wage Act 1998. 

HMRC said its enforcement of the minimum wage was “in line with the law”.


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