03 January 2019 
Caroline Jones, Employment tax director
It has been reported that the food chain, Iceland is facing a potential bill from HMRC for £21m as a result of NMW failures. In Iceland’s case, the areas that HMRC have focussed on are Christmas Club savings and uniforms. The background to this is that employees can enter into a voluntary scheme whereby they set aside money from their weekly pay, which is then paid into a ring-fenced bank account. The arrangement is used so that employees can save throughout the year. They can withdraw the money they have saved whenever they want and are not just restricted to taking it at Christmas. Some employees who participated in this arrangement fell below NMW when their contributions to the savings club were taken into account. HMRC’s view is that this causes a breach of NMW regardless of whether they eventually received all their savings back. This could impact universities who have similar savings clubs.
In addition to the issue with the savings club HMRC have also considered Iceland’s uniform policy and are challenging the fact that Iceland has a policy requiring retail staff to wear sensible shoes. This mirrors HMRC’s previous stance when naming and shaming Wagamama who had to repay over 2,500 employees for the cost of black jeans that they were required to wear under Wagamama’s uniform policy.
It’s a timely reminder that uniform policies can cause NMW issues and that even where an employee enters into a voluntary arrangement, employers can still be caught out from an NMW perspective. HMRC continues to take a tough stance on NMW, whether there is a deliberate underpayment or where the breach is technical in nature.
