In Middlesbrough Football & Athletic Company (1986) Limited v HMRC ET 2501182/2018 the Employment tribunal held that deductions from pay for season tickets should not be taken into account when assessing whether employees had been paid the national minimum wage (NMW).

The National Minimum Wage was introduced in 1999.

  • It is a minimum hourly rate applying to all workers over the age of 18.
  • HMRC has the power to issue penalties to and “name and shame” employers who pay their employees below the NMW.

The National Minimum Wage Regulations 2015 provide that deductions made by an employer in a pay reference period for “the employer’s own use and benefit” are treated as reductions when assessing whether NMW is being paid or not, except that certain amounts are not treated as reductions, including:

  • payments to purchase goods or services unless the purchase is a contractual requirement.
  • deductions or payment in respect of the worker’s conduct where they are contractually liable.
  • deductions, or payments, under an agreement for a loan or advance of wages.

Middlesbrough Football Club (MFC) made deductions from certain employees’ net pay to pay for football season tickets (cards) for family members.

  • The employees’ gross wages were all at or above NMW but after the deductions fell below it.
  • There was no contractual obligation to buy the season cards. The employees had requested that they be able to pay for the cards in instalments through their pay and confirmed their agreement to the deductions in writing.
  • The amounts were paid into an account which the employees had general use of.
  • HMRC issued notices of underpayment in respect of NMW and MFC appealed. Following the receipt of the notices the club stopped accepting payments for the cards in instalments.

The Employment tribunal allowed the appeal finding that:

  • the employees had the benefit and use of the amounts deducted and not the employer
  • adopting a purposive approach, the amounts were payments to purchase goods where there was no contractual requirement (in the employment contracts) to do so, despite having been collected by way of a deduction.


The NMW legislation can be very confusing and complex to follow and with naming and shaming being introduced in 2013 it represents a significant reputational risk to many employers. The judge refused to award costs against HMRC here saying that they had not acted unreasonably, and pointing out that such was the complexity of the law that the case turned on the interpretation of the words ”payment” and “deduction” and on the judge’s own ability to distinguish this interpretation from the courts’ decision in a previous case.

Links to our guides:

National living wage rates /National minimum wages rates

Salary sacrifice & Optional Remuneration schemes 

Directors & the NMW

External case link:

Middlesbrough Football & Athletic Company (1986) Limited v HMRC ET 2501182/2018




Would you like to unlock the whole site? 

Recommendations: read what subscribers have to say about this webservice.

Click here to SUBSCRIBE & join us. We have a fully transparent pricr list. Alternatively, Register for FREE news.