National Minimum Wage increases
The adult rate of the National Minimum Wage (NMW) will rise to £5.80 (£5.73) an hour in October 2009. This is payable to those age 22 and over.
The hourly youth development rate will increase to £4.83 (£4.77) and for 16 and 17 year olds to £3.57 (£3.53) an hour.
Penalties for non compliance
HMRC are able to charge penalties to those employers found to be in breach of the NMW rules.
From 6 April 2009, automatic penalties are levied on employers where HMRC officers find NMW arrears. The penalties range from £100 to £5,000 with 50% prompt payment discounts for employers who settle within 14 days of notification.
The penalty is payable in addition to arrears owed to the workers.
The penalty notice will detail the amounts due to workers (calculated according to the formula shown below) and any penalty due on those arrears. The penalty is calculated as half the total underpayment. The underpayments are uprated to take into account the length of time the arrears have been outstanding.
For each payment period the formula is:
Original underpayment x Current NMW rate = Arrears
Original NMW rate
In serious cases of non compliance the employer may be tried in a Crown Court and in those cases the fines are unlimited.
If you have any queries on the NMW please do get in touch.
Internet links: HMRC guidance on penalties , NMW news release
To find out more about how we can help you, please contact Simon Coles & Co, London Chartered Accountants. |
