Employment tax: implications of the Supreme Court Mencap decision

Key points

• The appellants claimed that they were due national minimum wage during night shifts while sleeping or while awake but not actually working.
• The Supreme court dismissed the appeal of both appellants.
• The court highlighted the distinction between ‘actually working’ and ‘being available for work’ is a question of fact.
• The need for employment taxation practitioners to understand national minimum wage legislation and its potential tax cost to a business.
• Employers should agree sleep-in allowances in advance with employees – they do not count as pay for minimum wage purposes.

The decision in the double case of Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad was handed down on 19 March 2021 having been heard at the Supreme Court in February 2020. It was delayed in part due to the death on 1 December 2020 of the presiding judge Lord Kerr of Tonaghmore. The...