Stopping abuse of NMW through payment of expenses
New regulations came into force on 1 January 2011 to prevent abuse of the national minimum wage rules.
The specific focus is those employment businesses and umbrella companies that include travel and subsistence expenses in calculations of whether the worker is being paid the national minimum wage.
The new legislation is designed to stamp out these practices. HMRC have made clear that they will identify businesses seeking to circumvent the national minimum wage and take appropriate action. This includes employment businesses and umbrella companies running the risk of having their travel and subsistence expenses reporting dispensation revoked. Such businesses will also be liable to pay arrears of tax and national insurance together with interest and, where appropriate, penalties.