123: HMRC to enforce national minimum wage liabilities against transferees following TUPE transfers

HMRC has announced a change in its policy on enforcing national minimum wage (NMW) penalties on a TUPE transfer.

With effect from 2 July 2018, all NMW liabilities, including the full penalty amount, are being enforced against the transferee employer. Previously, the transferor was charged for any penalties relating to arrears accrued prior to the transfer. Financial penalties can amount to up to 200% of the total underpayment, capped at £20,000 per worker. This highlights the need to check for any potential NMW underpayment issues prior to a transfer, and to ensure that the sale agreement includes appropriate warranties and indemnities.