Claimant v Commissioners for HM Revenue & Customs — 2023

The appellant appealed against a notice of underpayment issued by HMRC under the National Minimum Wage Act 1998. The disputed issues concerned whether accommodation-related deductions or payments for three workers fell within Regulation 14 of the National Minimum Wage Regulations 2015 and therefore had to be treated as reductions, subject to the accommodation offset.

The Tribunal found that deductions made from wages for Mr Gibson, Mr Cartwright and Mr Muller during the periods when the appellant deducted rent from pay were deductions the appellant was entitled to make and were as respects the provision of living accommodation by the employer. The Tribunal found that the accommodation was provided by the appellant for Regulation 14 purposes, applying a purposive approach, despite the properties being owned by Mr Lawton, or by Mr Lawton and another individual.

The Tribunal reached a different conclusion for payments made by Mr Muller directly from November 2018 onwards to a bank account for the benefit of the landlords. Those payments were not deductions the appellant was entitled to make and were not payments the appellant was entitled to receive. The notice of underpayment therefore required rectification for those sums only, with the precise figures to be agreed by the parties or determined at a further hearing.