National Minimum Wage
The National Minimum Wage (NMW) sets the lowest legal hourly pay that workers in the UK are entitled to. It applies to most workers and is updated every April. Failure to meet the requirements can result in HMRC penalties, back pay orders, and reputational damage.
At My Tax Consultants, we help employers apply the correct national minimum wage rates, maintain accurate records, and handle all necessary payroll calculations. With constantly shifting regulations and rate brackets, getting this wrong can cost your business far more than just money. Our service ensures your employees are paid legally and fairly, protecting your business from enforcement action.
What is the National Minimum Wage?
The National Minimum Wage is a legally required hourly wage set by the UK government. It applies to employees based on their age and job role. There is also a separate National Living Wage, which applies to those aged 21 and over.
Employers are responsible for identifying the correct rate based on each worker’s age, role, and employment status. As of April 2025, new rates apply across all categories. Businesses must review wages annually and adjust payroll systems to reflect these changes without delay.
It is not enough to simply pay a flat rate across your workforce. Differences in pay must be justified and updated in line with government announcements.
Compliance with National Minimum Wage Rules
Staying compliant involves more than just knowing the rates. Businesses must also:
- Track age changes for young workers, especially those turning 18 or 21 mid-year
- Avoid unlawful deductions that take wages below the legal threshold
- Accurately record working hours, including travel time, training, and waiting periods
- Identify salaried hours versus hourly pay
- Review tips, bonuses, and non-pay benefits which cannot count towards national minimum wage pay
My Tax Consultants conducts a full review of your payroll system, employee records, and time tracking to ensure that all workers receive their lawful pay. We also provide support in cases where historical underpayments need to be corrected or explained to HMRC.
Who Must Be Paid the National Minimum Wage?
Almost all workers in the UK are entitled to the national minimum wage, including:
- Full-time and part-time workers
- Casual labourers
- Apprentices (special rates apply)
- Agency workers
- Workers on zero-hours contracts
- Trainees
Even directors with employment contracts are subject to the rules. Exemptions are rare and must be reviewed carefully. Our role is to clarify who qualifies and apply the correct national minimum wage rates accordingly.
Common National Minimum Wage Pitfalls
Many businesses unintentionally fall below minimum wage compliance by:
- Miscalculating deductions for uniforms or tools
- Ignoring travel time between appointments
- Using incorrect hourly rates for salaried workers
- Failing to update employee ages or national rates on time
- Paying apprentices incorrectly after their first year
We help identify these issues before they become costly. Our payroll audits, advisory services, and monthly support keep your business on the right side of the law.
HMRC Enforcement and NMW Penalties
Non-compliance can lead to serious consequences. HMRC may:
- Demand back pay to affected workers
- Impose penalties of up to 200% of the underpayment (capped at £20,000 per worker)
- Name and shame employers in public reports
Even honest mistakes are treated seriously. That’s why our clients rely on us to monitor national minimum wage compliance and prepare for any HMRC reviews. If your business is selected for an audit, we provide documentation, employee records, and advice throughout the process.
Why Choose My Tax Consultants?
At My Tax Consultants, we specialise in guiding businesses through all aspects of National Minimum Wage law. Our services include:
- Reviewing payroll data to identify risks
- Implementing systems that flag potential underpayments
- Providing annual updates on rate changes
- Correcting past errors and preparing disclosures if necessary
- Managing NMW compliance across different pay structures and employee types
Our goal is to provide clear, dependable payroll advice that supports your obligations as an employer—without confusion or missteps.
Contact My Tax Consultants Today
If you’re unsure about your National Minimum Wage obligations, or want to audit your payroll processes before HMRC does, get in touch today. Let My Tax Consultants help you apply the correct national minimum wage rates, manage payroll compliance, and avoid penalties.
