UK Select Committee to question HMRC over Iceland minimum wage probe UK Select Committee to question HMRC over Iceland minimum wage probe

UK Select Committee to question HMRC over Iceland minimum wage probe
09 Jan 2019

The UK’s Treasury Select Committee is to question Her Majesty’s Revenue & Customs (HMRC) over its investigation of a supermarket chain’s Christmas saving scheme, which took staff wages below the statutory minimum wage.

According to Economia, the Committee wants to know why Iceland’s Christmas Club is being investigated when the scheme is voluntary, the money deducted from employees’ wages is ring-fenced in a separate bank account controlled by an independent trustee company whose directors are completely unconnected to Iceland, and staff can get their money back in its entirety at any time.

Iceland is facing a £21 million (US$26.6 million) bill from HMRC, which alleges that it broke minimum wage rules with the savings scheme because pay levels dropped below the minimum. The alleged underpayment amounts to about £3.5 million (US$4.4 million) a year over a six-year period. On top of any bill for backpay, Iceland could also face a fine that is double the amount of the alleged underpayment.

An HMRC spokesperson said: “HMRC does not comment on individual cases. All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff. HMRC won’t hesitate to take action to ensure that workers receive what they are legally entitled to.”

Keith Hann, Iceland’s director of corporate affairs, said the company was in discussions with HMRC over the allegations. “We hope that HMRC might see sense,” he said, adding that the Christmas Club had “only become an issue as the differential between our pay rate and the minimum wage has narrowed”.

According to the Independent, more cases like this are likely to crop up, as after years of lax enforcement, HMRC has now been given the money to actively enforce the rules.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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The UK’s Treasury Select Committee is to question Her Majesty’s Revenue & Customs (HMRC) over its investigation of a supermarket chain’s Christmas saving scheme, which took staff wages below the statutory minimum wage.

According to Economia, the Committee wants to know why Iceland’s Christmas Club is being investigated when the scheme is voluntary, the money deducted from employees’ wages is ring-fenced in a separate bank account controlled by an independent trustee company whose directors are completely unconnected to Iceland, and staff can get their money back in its entirety at any time.

Iceland is facing a £21 million (US$26.6 million) bill from HMRC, which alleges that it broke minimum wage rules with the savings scheme because pay levels dropped below the minimum. The alleged underpayment amounts to about £3.5 million (US$4.4 million) a year over a six-year period. On top of any bill for backpay, Iceland could also face a fine that is double the amount of the alleged underpayment.

An HMRC spokesperson said: “HMRC does not comment on individual cases. All businesses, irrespective of size or business sector, are responsible for paying the correct minimum wage to their staff. HMRC won’t hesitate to take action to ensure that workers receive what they are legally entitled to.”

Keith Hann, Iceland’s director of corporate affairs, said the company was in discussions with HMRC over the allegations. “We hope that HMRC might see sense,” he said, adding that the Christmas Club had “only become an issue as the differential between our pay rate and the minimum wage has narrowed”.

According to the Independent, more cases like this are likely to crop up, as after years of lax enforcement, HMRC has now been given the money to actively enforce the rules.

Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

OTHER STORIES THAT MAY INTEREST YOU

HMRC personnel recognised in UK's New Year's Honours list

All UK workers entitled to itemised payslips as of April

Fears that Scotland's widening UK tax gap could damage recruitment

 

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