A range of measures to ensure that businesses comply with their wage obligations have been announced by the Business Secretary.

The national minimum wage is due to increase form £6.50 to £6.70 for people 21 and over from 1 October 2015. This will be followed by the introduction of the mandatory national living wage for people 25 and above, initially set at £7.20, in April 2016.

The measures announced include:

  • doubling penalties for non-payment
  • a new team to handle criminal prosecutions will be set up at HMRC
  • ensuring that those found guilty will be considered for disqualification from being a company director for anything up to 15 years.
  • increasing the enforcement budget
  • The increased penalties will be applied to companies who fail to pay their staff at least the minimum wage, will now be 200% of arrears. The penalty will be halved if the company pays the penalty within 14 days, and the maximum penalty for individual workers will remain at £20,000.

The new HMRC team of compliance officers will have a number of powers at their disposal to investigate and prosecute cases of non-compliance.

John Allan, national chairman for the Federation of Small Businesses, said:

“As well as focusing on enforcement, the government must clearly and proactively communicate the charge to employers – ensuring businesses fully understand what they need to do and when.

“This support and guidance is necessary so small businesses avoid inadvertently falling foul of the changes to the law. In addition, ministers should review the Employment Allowance, which must be set at the right level to help businesses meet the new requirements.”

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About Graham Knight

Graham Knight FCCA AIRPM Graham has vast experience of commercial accountancy within the UK and oversees. Graham is a genuine specialist in the Service Charge and Block Management industry and was a Finalist at the 2015/16 National Property Awards. Graham volunteers much of his spare time to not-for-profit Hastings Sport CIC.

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