HMRC Clarifies Travel & Subsistence Claims at or near Minimum Wage

28th July 2010

On February 25^th planIT covered the HMRC consultation in respect of travel and subsistence expense schemes and the arrangements for temporary workers paid at or near National Minimum Wage (NMW).  

The Government has now clarified how travel and subsistence schemes will marry up with the National Minimum Wage.

As expected yesterday's announcement makes it clear that any payments made for such expenses will have to be in addition to the minimum wage. Nothing will change for contractors with planIT as we have not used such technicalities to avoid these rules.

The proposed changes will take effect on 1st January 2011 and will be implemented as follows:

The National Minimum Wage Regulations include provisions which set out how a worker's pay is calculated and determine whether or not the worker is receiving at least National Minimum Wage (NMW).

• The current Regulations list certain payments that are made by the employer to a worker which are ignored when calculating the worker's pay, i.e. the employer is not allowed to use these payments to meet the NMW.
• The proposed amendment to the regulations, announced on 27 July 2010, will mean that the payments made by an employer to a worker for travel and subsistence will be added to this list. As a result, employers will need to ensure that they pay their workers the NMW in addition to the payments under the travel and subsistence schemes.

The full response summary can be read here: http://www.hm-treasury.gov.uk/d/consult_minimumwage_expenses_responses.pdf