HMRC have issued a reminder that employers may accidentally be underpaying temporary staff engaged in seasonal jobs. Employees should check their wage slips to ensure that the actual hours paid are those worked.

Employers must pay the National Minimum Wage (NMW) or National Living Wage (NLW), the rules for which can be extraordinarily complex.

HMRC suggests that areas typically overlooked and underpaid by employers include unpaid working time, such as:

  • Time spent opening and closing a shop.
  • Training time.
  • Picking up extra shifts and working longer hours which are not recorded.

Alternatively, if an employer makes deductions for costs such as uniforms or accommodation, this can also reduce pay rates.

Employees who provide their own equipment, uniform or have Worked from home can also claim deductions for tax. See Employment expenses: how to claim tax relief

HMRC notes that non-compliance in 2022/23 led employers to underpay £13.7 million in wages to more than 108,000 UK workers.

Useful guides on this topic

Working from home: rates & allowances
What tax-free allowances are there for working from home? What allowances can be paid to homeworking employees?

National Living Wage & National Minimum Wage
 'At a glance' guide of current and historic National Living Wage/National Minimum Wage rates.

National Living Wage/National Minimum Wage: HMRC checks
What checks can HMRC carry out to check that employers are paying at least the National Living Wage/National Minimum Wage? What are the implications of paying too little? 

External links

Check your pay’ call to people in Christmas jobs


Back to Nichola's SME Tax W-update 21/12/2023