Tax Update (June 2009)
Penalties for Non-compliance with NMW
From April 2009 HMRC introduced automatic penalties for those
who do not comply with the National Minimum Wage (NMW). Employers
who fail to pay the minimum wage will now face automatic financial
penalties and the most serious cases could face unlimited
penalties.
Under normal circumstances where you are found to have not met
the requirements you will incur a penalty of between £100 and
£5,000 dependant upon how much you owe your workers. Even though
you may have underpaid your employees by mistake you will still
face a penalty.
This is in addition to the requirement to pay any arrears based
on current rates rather than historic rates. It is important to
retain all possible information relating to employee payments for
at least 6 years as HMRC can pursue arrears claims for workers
going back up to 6 years.