Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Anomalies in the national minimum wage legislation

16 September 2022 / Ian Thomas
Issue: 4857 / Categories: Comment & Analysis
94279
Unintended consequences?

Key points

  • Non-compliance with NMW rules is usually technical in nature involving salary sacrifice arrangements.
  • It is important for advisers to address some potentially unintended consequences of the NMW rules.
  • HMRC recently suggested in an investigation that rather than disallowing the proportion of a salary sacrifice attaching to the allowable elements of employee’s salary the entire sacrifice including the amount relating to disallowed payments should be disallowed.
  • Make sure contracts are drafted in accordance with the way that the hourly rate is calculated.
  • An employer that pays a periodic performance bonus in addition to a salary as a salaried hours worker could find itself in breach of NMW if the worker is reclassified as ‘unmeasured’ as defined by the 2015 Regs.
  • Pay careful attention to any policy wording surrounding dress requirements at work.
  • In certain circumstances amounts deducted for employee accommodation can be treated...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon