National Minimum/National Living Wage Reviews

The National Minimum Wage (NMW) and National Living Wage (NLW) are important legal requirements for employers in the UK. They set a minimum hourly rate that employers must pay their employees, depending on their age.

In recent months, HMRC has been carrying out a number of NMW reviews. This is a process where HMRC checks to make sure that employers are paying their employees the correct NMW or NLW rate.

During these reviews, HMRC has identified two areas that employers may be overlooking when calculating NMW or NLW payments. These are:

• Accommodation offset rules

• Uniform

Accommodation offset rules

If you provide accommodation to your employees, this can be offset against their NMW or NLW payments. However, there are strict rules about how this can be done.

The weekly rent that you can offset against NMW or NLW payments is capped at £63.70. This means that if your employee pays more than £63.70 per week in rent, you will need to make an adjustment to their NMW or NLW payments.

You can find more information about the accommodation offset rules on the HMRC website.

Uniform

When people talk about uniform you automatically think about the grey/black outfits worn by staff at a popular fast food outfit. However, under NMW requirements even small stipulations like ‘closed toe shoes’ or ‘professional dress’ can be deemed uniform in the eyes of HMRC.

If you require your employees to wear uniform, you will need to factor in the cost of the uniform when calculating their NMW or NLW payments. You can find more information about uniform and the NMW or NLW on the HMRC website.

If you are an employer, it is important to make sure that you are aware of the rules around NMW and NLW payments. If you are unsure about anything, you should seek professional advice.

Here are some additional tips for employers to avoid NMW or NLW compliance issues:

• Keep accurate records of all hours worked and pay rates.

• Review your pay practices regularly to make sure they are compliant with the latest NMW or NLW rates.

• Train your managers and supervisors on NMW or NLW compliance.

If you have any concerns about NMW or NLW compliance, seek professional advice.

By following these tips, you can help to ensure that you are compliant with the NMW or NLW and avoid any potential penalties.

Do get in touch with Forrester Boyd Chartered Accountants for a free no obligation conversation about your accountancy needs. Visit www. forrester-boyd.co.uk or email info@forresterboyd.co.uk