HMRC has named and shamed over 500 UK employers for failing to pay the National Living Wage (NLW) or the National Minimum Wage (NMW).

The employers will now be forced to repay over £7.4 million to nearly 60,000 workers who had been left out of pocket.

Employers who left nearly 60,000 workers over £7.4 million out of pocket must now repay their employees.

The rates for NLW increased to £12.21 an hour on 1 April and the government says this put £1,400 into the pockets of full-time workers on NLW.

Justin Madders, Minister for Employment Rights, said:

‘There is no excuse for employers to undercut their workers, and we will continue to name companies who break the law and don’t pay their employees what they are owed.

‘Ensuring workers have the support they need and making sure they receive a fair day’s pay for a fair day’s work is a key commitment in our Plan for Change. This will put more money in working people’s pockets, helping to boost productivity and ending low pay.’

Internet link: GOV.UK

The tax gap estimate was 5.3% for the 2023/24 tax year, according to the latest data from HMRC.

The tax gap is the difference between what tax is expected to be paid and actually paid.

HMRC collected £829.2 billion in the 2023/24 tax year representing 94.7% of all tax due, leaving £46.8 billion unpaid.

However, HMRC revised the figures upwards for 2022/23, from 4.8% (£39.8 billion) to 5.6% (£46.4 billion). It also warned that the latest figures may be revised as more data becomes available.

Some of the key findings from this year’s calculations show:

• Small businesses represent the largest proportion of the tax gap (60%).
• Corporation Tax accounts for 40% of the total tax gap.
• Failure to take reasonable care (31%), error (15%) and evasion (14%) are among the main behavioural reasons for the overall tax gap.

Ellen Milner, Director of Public Policy, said:

‘These figures show the stubbornness of the tax gap and how optimistic the government’s target of a £7.5 billion reduction by 2029/30 is.

‘While large businesses and wealthy individuals are often accused of not paying enough tax these figures suggest that their total share of the tax gap is not much more than a quarter of that of small businesses.

‘The small business figures reflect big upward revisions from HMRC a year ago as a result of a random enquiry programme carried out in 2020/21, which identified greater inaccuracy and non-compliance than previously forecast.’

Internet link: HMRC press release CIOT

The government should take a more strategic approach to tax policy, consulting earlier and giving greater thought to the design of the tax system, says Nichola Ross Martin, President of the Chartered Institute of Taxation (CIOT).

In her inaugural speech as CIOT President, Ross Martin said that making a success of MTD will need HMRC and tax professionals to continue to work closely together.

She also promised to continue to press for improvements to HMRC service levels over the year ahead.

The CIOT President also encouraged the government to consider introducing a statutory employment test

In addition, she urged Institute members and employers to feed into a review of the Chartered Tax Adviser (CTA) qualification.

Ms Ross Martin said:

‘While there is plenty of argument about rates and burdens in parliament, there is very little about reform and design.

‘Take employment taxes. The PAYE system is the government’s main breadwinner. Successive governments have tweaked the rates and thresholds for national insurance but paid rather less attention to the fundamental issues as to how tax policy might adapt to cope with the changing world of work.

To pose these questions is not to argue for an ‘everything everywhere all at once’ approach to tax. But it is to point out that there is more to tax policy than rates and thresholds. Strategy is crucial.’

Internet link: CIOT

Taxpayers are being urged to check their online HMRC account after scammers attempted to defraud the tax authority using individuals’ data and login details.

The Low Incomes Tax Reform Group (LITRG) is also reminding people of the importance of being vigilant and taking care of personal data.

HMRC recently announced that criminals had targeted the online tax accounts of nearly 100,000 taxpayers to try to make false tax refund claims.

In some cases, HMRC have said that criminals gained people’s login credentials and made use of existing online tax accounts. But, in others, they gained personal data that enabled them to set up new online tax accounts via the Government Gateway.

HMRC have locked down the compromised accounts as a precaution. They are writing to those affected with details on how they can regain access to their accounts. 

Joanne Walker, Technical Officer at LITRG, said:

‘HMRC have confirmed that they were the victim of online scammers who tried to defraud them of money using the details of individual taxpayers.

‘While HMRC say this attack has not resulted in any tax-related financial loss for individual taxpayers, it is a timely reminder that fraud is an ongoing threat.’

Internet link: LITRG

Almost half of UK sole traders feel unprepared for upcoming Making Tax Digital (MTD) for Income Tax changes, according to research conducted by IRIS Software.

The new MTD rules mandate digital record-keeping and quarterly Income Tax updates starting April 2026 and non-compliance can lead to significant penalties.

The study found that almost one in three sole traders have never heard of MTD,

MTD for Income Tax will require self-employed individuals, landlords and small businesses earning over £50,000 to keep digital financial records and submit quarterly updates using compatible software from April 2026. The threshold drops to £30,000 in 2027 and to £20,000 in 2028.

The changes could place a significant burden on business owners, who will be required to submit at least five updates to HMRC each year.

Mark Chambers, Managing Director at IRIS Accountancy, said:

‘These findings highlight an important moment of opportunity for the UK’s sole traders. With MTD just around the corner, there’s a real chance for businesses to modernise their financial processes, unlock efficiencies, and gain better visibility of their income and expenses.

‘It’s encouraging to see that nearly a quarter feel ready to meet the requirements, but that leaves a significant portion not experiencing the benefits of digitalised tax reporting that compliance will bring.’