With changes expected to be announced about the UK’s current National Minimum Wage (NMW) and National Living Wage (NLW) rates in the near future, HM Revenue and Customs (HMRC) has updated its checking process.
Where an NMW check is initiated, employers are required to complete a self-review of company records and HMRC has now updated its factsheet with what exactly it expects employers to do in these instances.
HMRC choose which employers to check based on (one of the following):
- its own research
- if it has received a complaint that an employer is paying one or more of their workers below the NMW or the NLW
How does the NMW self-review work?
Your appointed case officer will tell you which information and records HMRC wants to look at because, as a UK employer, you must be paying your employees at least the NMW and NLW.
The review you conduct will depend on several factors, including the size of your workforce, the work that is carried out and the number of workers who have not been paid the correct rate of NMW.
In addition to this, you also need to consider the changing NMW rates and whether the contracts of your workers have changed.
As part of the process, you will need to work out if there are any outstanding NMW debts. You need to look at each pay reference period separately and work out if there are any underpayments, divide that by the NMW rate at the time and multiply that figure by the current NMW rate.
Once the self-review is complete, you must submit the information to HMRC, confirm employee details and the period in which they were underpaid.
You are also required to keep details of your self-review for future reference, in the event HMRC decides to run another NMW check on your company.
It is extremely important that, if you are required to self-review, you take the appropriate action to complete the process accurately, and to provide details of any issues identified to HMRC.
Support available for businesses
Analysing your payroll records will take time, but it is important that you ensure you meet the current NMW and NLW requirements.
Our expert team can help you meet your obligations and to submit the correct information.
If you need support with an NMW self-review, or you are concerned about paying your employees the correct rates of NMW and NLW, please contact our payroll bureau today.
