Iceland is facing a £21m bill from HM Revenue & Customs, which alleges that the discount supermarket chain broke minimum wage rules with a Christmas savings scheme.
The taxman believes that the savings scheme, through which staff voluntarily had sums deducted from their wage packets each week to be saved in a separate account, meant pay dropped below the minimum wage. HMRC said the alleged underpayment comes to around £3.5m per year, over a six year period. Iceland’s ‘Christmas Club’, as it is known, has been operating for decades.
Iceland could also face a fine, which could be double the amount of the alleged underpayment, according to the Times, which first reported the story.
An HMRC spokesperson said,
HMRC does not comment on individual cases. All businesses, irrespective of size or business sector are responsible for paying the correct minimum wage to their staff.
HMRC won’t hesitate to take action to ensure that workers receive what they are legally entitled to.
Keith Hann, Iceland’s director of corporate affairs, said the company was in discussions with HMRC over the allegations. He said,
We hope that (HMRC) might see sense. The Christmas Club had only become an issue as the differential between our pay rate and the minimum wage has narrowed.
The 2019 UK national minimum wage is £8.21 per hour for workers aged 25 and over, falling to £7.70 for those in the 21 to 24 age bracket, £6.15 for those aged 18 to 20, and £4.35 for under-18s.
Aphrodite is a creative writer and editor specialising in publishing and communications. She is passionate about undertaking projects in diverse sectors. She has written and edited copy for media as varied as social enterprise, art, fashion and education. She is at her most happy owning a project from its very conception, focusing on the client and project research in the first instance, and working closely with CEOs and Directors throughout the consultation process. Much of her work has focused on rebranding; messaging and tone of voice is one of her expertise, as is a distinctively unique writing style in my most of her creative projects. Her work is always driven by the versatility of language to galvanise image and to change perception, as it is by inspiring and being inspired by the wondrous diversity of people with whom paths she crosses cross!
Aphrodite has had a variety of high profile industry clients as a freelancer, and previously worked for a number of years as an Editor and Journalist for Prospects.ac.uk.
Aphrodite is also a professional painter.
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