Are you "Paying National Minimum Wage"?

HMRC have now started sending out random PAYE notices asking in you are paying the NMW correctly.

Didn't find your answer?

Several of my PAYE clients have received notices titled "Paying National Minimum Wage" which basically says make sure you are paying the NMW correctly. I get an email in my inbox telling me to log-on and look at my notices which is a bit annoying when all HMRC has sent is a reminder to comply with your statutory obligations to pay the NMW. Haven't HMRC got anything better to do than clogging up the PAYE Notices system with useless messages - what next? Make sure you deduct tax correctly? Always put the hot water on your teabag first before adding milk?

Sorry, Friday rant....

Replies (16)

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Stepurhan
By stepurhan
24th May 2024 12:33

I wonder if they sent one to themselves, given about a third of HMRC is paid at that level according to Mr Harra.

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Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
24th May 2024 13:14

Slight tangent - The Insolvency Services are now automatically rejecting many director claims for redundancy etc in insolvency cases, unless the directors are prepared to sign something admitting they paid themselves less than the NMW and therefore committed fraud.

This seems to be common where directors pay themselves the minimum salary and take the rest in dividends to stay under certain tax thresholds. (C13k?)

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Replying to Insolvency Practitioner:
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By Paul Crowley
24th May 2024 13:37

That seems reasonable to me.
If the director wants tax efficiency then accept the consequences.
The business failed under his watch. Why should they be subsidised for failure? And yes, HMRC are.

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Replying to Paul Crowley:
DougScott
By Dougscott
24th May 2024 17:53

I thought directors were exempt from paying the NMW to themselves so there is no "fraud"?

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Replying to Dougscott:
JCACE
By jcace
24th May 2024 18:56

The point is probably more related to the subsequent redundancy claim and its links to previous pay levels/circumstances.

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Replying to Dougscott:
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By FactChecker
24th May 2024 22:44

HMRC are hunting for fresh meat in that little-understood pool of whether or not a Director is purely receiving remuneration as an 'office holder' - which is not subject to NMW/NLW - or (at least in part) as a worker.

Whether or not they fully understand it - per https://www.gov.uk/hmrc-internal-manuals/national-minimum-wage-manual/nm... - is debatable, but few agents do (and even fewer directors).

And watch out - 'lack of a written contract' isn't proof positive that they aren't being paid for some duties outside of their 'office holder' responsibilities ... that's where the waters get really quite murky.

Of course, as jcace hints, some Directors appear to believe in multiple different descriptions of their duties and remuneration at the same time ... which may work in the multiverse, but tends to get short shrift from HMRC.

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Replying to Dougscott:
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By Paul Crowley
31st May 2024 14:47

They are, but only if office holders, not employees. Claiming redundancy means that they were an employee so should have complied with NMW.

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By AdamJones82
24th May 2024 15:46

I've had them for ALL my employer clients, not just director-only ones

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By bettybobbymeggie
24th May 2024 16:02

I always put the milk in first - d'oh!

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Replying to bettybobbymeggie:
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By Susan56
31st May 2024 10:13

With a tea bag?

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By FactChecker
24th May 2024 22:40

See previous thread, earlier this week, on same topic:
https://www.accountingweb.co.uk/any-answers/paying-national-minimum-wage...

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Replying to FactChecker:
DougScott
By Dougscott
25th May 2024 15:49

Sorry I missed that. So it really does seem to be a case of HMRC disappearing up their own a**e holes.

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Replying to Dougscott:
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By FactChecker
25th May 2024 16:11

Let's hope (no doubt forlornly) that in that case they meet what's travelling in the opposite direction ... and so experience what we do on an only too regular basis.

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Replying to Dougscott:
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By WallyGandy
31st May 2024 09:00

Where HMRC have been for years.....

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By Tom+Cross
26th May 2024 15:31

One wonders why they’ve never bothered with this topic, before. And with so many reminders all emailed to the one agent. Who, of course, has an agent code, which you would think HMRC could relate to.
I guess the answer to my own question is, that this is just another ‘box-ticking’ exercise, in the grubby world of the public-sector. As usual; grossly inefficient and likely a complete waste of time. I guess that even Sir Harra, isn’t aware of what’s going on. Neither was Paula Vennells, and look what a pickle she’s in, now.

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By Retrocanary
31st May 2024 11:33

Given that there's no way of them knowing one way or the other from the FPS reporting whether there's a NMW breach, I'm wondering what triggers these notifications to be sent. Either there sending them to everyone gradually or its a large amount of guess work.

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