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HMRC internal manual

National Minimum Wage Manual

After notice of underpayment issued: employer dies and a notice of underpayment has been issued

When an employer dies, the impact on the payment of the arrears depends on the deceased person’s former position within the business and whether or not the business continues trading after their death. In no circumstances should any correspondence be issued or addressed to the deceased. 

If an employer dies before the Notice of Underpayment is issued see NMWM13070

Sole Trader

If the deceased employer was a sole trader, the business is still liable to pay both the arrears to the workers and the penalty. Any amount outstanding will remain as a debt against the assets of the business. Discrete enquiries should be made to establish who is dealing with the affairs of the deceased and their former business and whether it is to be closed, taken over or sold.

If the business is to be closed, you must notify the personal representative of the deceased that the arrears and penalty are still due and payable and should be paid out of the assets of the business. You should send them a copy of the Notice of Underpayment and arrears schedule, with an appropriate covering letter. Make sure you address the covering letter to the person now dealing with the deceased’s business affairs, at their own address. Do not make reference to the deceased’s name or former address in the address area of the covering letter. Start the covering letter by advising the person now dealing with the business affairs for the deceased that you are writing to them because they are dealing with the deceased’s personal affairs, including the business previously run by the deceased.

If the business continues to trade or is sold to a new owner, the liability remains with the original business unless there is a transfer of workers under the Transfer of Undertakings Protection of Employment (TUPE) to a new business. In these circumstances contact the Operational Advisory Team for further advice (NMWM13060).

Other Businesses, Companies and Organisations

In other circumstances, the death of a director, partner or officer will not usually affect enforcement action. The reason for this is that the liability to pay the arrears to the workers and the penalty to HM Revenue & Customs remains with the business itself and/or the remaining partners. For example:- in the case of a limited company, it is the company who is the employer of the workers, not the directors and shareholders. However, you must ensure that any future correspondence is not addressed to the deceased (NMWM13070).