Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Debt and return pursuit: Miscellaneous charges: National Minimum Wage Penalties (NMWP): Enforcement action - England & Wales

Legislation

NMWP work items raised prior to April 2009 are subject to the national Minimum wage Act 1998, Section 21 (5). This allows HMRC to pursue the penalty using Civil Procedure Rule 70.5.

On 6 April 2009 the National Minimum Wage Act 1998 was amended by the Employment Act 2008 by replacing Section 21 (5) with section 19E. Section 19E states:

A financial penalty under a notice of underpayment -

In England and Wales, is recoverable, if a county court so orders, under section 85 of the County Courts Act 1984 or otherwise as if it were payable under an order of that court.

NMWP cases which are suitable for CPR70.5

The following NMWP work items should be enforced by CPR70.5:

  • work items raised prior to 6 April 2009
  • linked sets of NMWP work items when some or all of these have been raised prior to 6 April 2009.

NMWP work items raised after 6 April 2009 can be enforced using CPR70.5 when this is the cheapest method of CCP enforcement. To establish the cost before deciding the best way to enforce these cases, see DMBM668750.

CPR70.5

Part 70.5 of the Civil Procedure Rules 1998 (CPR70.5) allows payment of the debt to be enforced through the county court as if it were an order of court.

CPR70.5 is a modified form of county court proceedings and it is often used by bodies that have no separate enforcement power. This is usually a cheaper enforcement method and there is no mechanism for the debtor to either defend or admit the liability.

Cases that are appropriate for CPR70.5 should be transferred to BEU:

Transfer taxpayer owner and debt work item owner to BEU (OU 302000) with a next action code of ‘Review’.

CCBC

You can use the CCBC interface for multiple NMWP work items and NMWP work items with other linked debts.

Claims that can be issued using IDMS/CCBC interface

If the case can go through the CCBC you must follow the guidance below. You should also refer to DMBM665360 onwards.

If the claim can be issued through the CCBC i.e. it is a singleton NMWP work item

  • transfer the taxpayer owner and all debt work item owners to the BEU (OU 302000)
  • ask your manager to use Authorise Access remote OU so that you can use BEU C/W CCP work list (your manager only needs to do this once)
  • use access remote OU to access the BEU CCP work list
  • request the issue of a ‘CPC Claim’ today.

Cases suitable for a manual claim

Only NMWP raised after 6 April 2009 can go through the CCP route via a Manual Claim i.e. Form N1. Usually you would only use this method if you have other linked debts (for example PAYE) and wish to put through to CCP together.

BEU will issue the manual claim

  • transfer taxpayer owner and work item owner to BEU (OU 302000) with a next action code of ‘Review’.

Bradford Enforcement Unit (BEU)

Managers note

Managers must:

  • ensure that the NMWP work items are dealt with as a priority at all stages
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000) DMBM570360(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • keep NMW Compliance teams advised of any issues.

BEU actions under CPR70.5

Where action is taken under CPR70.5

  • obtain and prepare form N322A following the guidance in DMBM665470 
  • send the completed form N322A with attachments and the fixed court fee 8.9 (DMBM668750) to the appropriate court
  • B/F the papers for 21 days for receipt of the court order (form N322) from the court.

Because the NMWP is now held in IDMS remember to record all actions you take;

  • record the actions taken on IDMS free format notes:
  • set the next action date 21 days later
  • set next action
  • note NMWP raised prior to 6 April 2009 will not be available on IDMS and therefore must be worked from the SAFE work list.

Action by the court

An officer of the court can give the court’s order. It does not have to go before a district judge. It is not a judgment but has a similar effect, including registration by Registry Trust Ltd. If it is satisfied with your application, the court will

  • make the order, and
  • serve form N322 on the respondent (the debtor) which orders them to pay the total sum including the court fee.

The court will

  • send you a copy of the order on form N322.

This shows the case number and the terms of the order.

You should

  • check that the details on the form N322 are correct
  • enter the case number on the papers and in column 3 of Book 28
  • keep the N322 securely with the papers
  • B/F for payment.

Follow up action

Where payment is not made within 14 days of the order, or the debtor has not contacted you regarding payment, you should follow the general guidance in DMBM666310.

CCP actions

For NMWP which are appropriate for a manual claim

  • follow normal guidance for the CCP action (DMBM665310).

Note that NMWP are not covered by CPR Practice Direction 7D (CPRPD7D) exception from the tracking system (DMBM665800). Therefore if the claim is disputed in the county court it will be subject to a tracking system. This determines what action needs to be taken before the case can go for trial and the speed with which it will progress through the court.

Distraint

When Part 3 of the Tribunal Courts and Enforcement Act is implemented DMB will have the option of taking distraint to collect the penalty charge. Implementation of this legislation is planned for April 2014.