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

HMRC internal manual

National Minimum Wage Manual

From
HM Revenue & Customs
Updated
, see all updates

After notice of underpayment issued: arrears and penalty paid in full within 14 days of service of notice of underpayment

Relevant legislation

The legislation that applies to this page is as follows:

* National Minimum Wage Act 1998, sections 19(8) and 19A

General

Notices of Underpayment inform the employer that all the arrears payable to all the workers named on the notice and the penalty must be paid within 28 calendar days of the date of service of the notice (counting the date of service as day 1) (NMWM14040).

However, employers who pay all the arrears to all the workers on the notice and also pay 50% of the penalty to HM Revenue & Customs within 14 calendar days of the date of service of the notice, are entitled to a ‘reduction’ of 50% of the original penalty shown on the notice.

Reduction of the Penalty for Prompt Payment

The notice will inform the employer that they can reduce the amount of the penalty by 50% if they pay:

  • all the arrears to all the workers named on the notice within 14 calendar days of the date the notice is served (counting the date of service as day 1), and
  • half the penalty to HM Revenue & Customs within the same 14 days.

If the employer complies with both of these conditions the NMW Officer should amend the charge on SAFE to account for the reduced penalty (NMWM14060).

When either of these conditions is not met in full, the employer remains liable to pay the full arrears to workers within 28 days of the date of service of the notice and is automatically required to pay the full amount of the penalty.