Posted: Wed 2nd Jan 2019

Deeside based Iceland facing £21m HMRC bill over staff Christmas savings scheme

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Wednesday, Jan 2nd, 2019

Deeside based Iceland could be slapped with a multi-million pound fine from HM Revenue & Customs after it accused the company of breaching minimum wage rules.

HMRC has threatened the supermarket chain, whose head office is on Deeside Industrial Estate, with a bill of “at least £21 million” according to the Times.

The issue revolves around a staff savings scheme that lets low-paid employees voluntarily set aside money to help to pay for Christmas.

HMRC claims that because Iceland staff voluntarily had sums deducted from their weekly wages, which is saved in a separate account and returned on demand, their pay technically had fallen below the minimum wage.

The alleged underpayment is of about £3.5 million a year for six years, even though staff chose to participate in the scheme and received all the money they had put in. The Times states.

The tax authority has also said the supermarket should compensate staff for the cost of footwear, after employees were told to wear “sensible shoes” to work.

Iceland provides safety footwear free of charge for use in warehouses store staff are not required to wear the shoes.

HMRC wants Iceland to refund store staff for two shoe purchases a year, at a “notional value of £20 each, going back six years, or it could face a fine.” The Times report says.

Iceland’s founder and chief executive Sir Malcolm Walker

Iceland’s founder and chief executive Sir Malcolm Walker said he is fighting HMRC’s claims and is prepared to go to court if necessary.

Walker said the government’s own Money Advice Service website has recommended that people should use “dedicated Christmas savings schemes [which] can help you to avoid dipping into your cash too early”.

He has also prepared a document called The Campaign for Common Sense, which describes the “growing red tape and bureaucracy affecting business”.  But he said there were few in government interested in addressing the issue.

“They [HMRC] will not give in, so I went to see the business secretary Greg Clark. He promised he would look into it — never heard from him again,” he said.

“I sat next to Theresa May at a dinner and gave [The Campaign for Common Sense] to her. She said, ‘Give it to Philip as I don’t have my handbag.’

And I said, ‘Promise you will read it?’ She said, ‘Yes.’ I then spoke to the secretary for Wales who was full of ‘yeah yeah, this isn’t right”, but I never heard from him.”

Iceland is to meet with Kelly Tolhurst, a junior minister in the business department, this month.

Sir Malcolm said that he was “confident we will get a positive outcome”.

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