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Change to Risks for NMW underpayment liabilities under TUPE
HMRC has recently announced a change in its approach to enforcing National Minimum Wage penalties from employers involved in TUPE transfers.

HMRC has confirmed that any liability for historic national minimum wage underpayment or any penalties relating to the underpayment, will be enforced against the new employer. This is irrespective of whether they were responsible for the underpayment or not. The rule change will apply from 2nd July 2018. Previously any such back pay or penalties were sought from the transferor for arrears occurring prior to the transfer. This is now no longer the case.

If you are a transferee employer involved in TUPE transfers, you need to ensure that the correct Employee Liability Information (ELI) data has been provided ahead of a TUPE transfer and that you have done as much due diligence as possible is done prior to the transfer date. In addition, you may want to discuss this with your solicitors so that the words of future indemnities in commercial contracts are amended to take into account the increased risk to your business from this change of approach from HMRC.
Posted on 10 Sep 2018


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