Claimant v Commissioners for HM Revenue & Customs — 2019

The tribunal considered Nurse 365 Ltd's appeal against HMRC's notice of underpayment under section 19 of the National Minimum Wage Act 1998. The appellant did not challenge the arithmetic of HMRC's calculations, but argued that deductions for travel, agency or recruitment costs, and accommodation should not be treated as reductions for national minimum wage purposes.

The tribunal found that deductions for travel costs were for the appellant's own use and benefit because they helped discharge liabilities incurred by the appellant in providing transport. The exemption for purchases of services from the employer did not apply because the sums were deducted from wages, rather than paid by workers after receiving remuneration.

The tribunal found that deductions for agency fees were also reductions. The contractual wording relied on by the appellant was too ambiguous to impose a contractual liability for repayment, and in any event the deductions were in respect of expenditure connected with employment. The tribunal also found that deductions for accommodation rent and deposits fell within the accommodation provisions, and that amounts exceeding the statutory accommodation offset reduced remuneration for national minimum wage purposes.

The appeal was unsuccessful. The tribunal held that all deductions identified by HMRC had the effect of reducing remuneration in the relevant pay reference periods, so the underpayment figure and associated penalty in the notice were correct.