According to the Department for Business, Innovation and Skills (BIS) 42% of proprietors in the hair and beauty field are not paying level 2 and level 3 apprentices the appropriate minimum wage. The hair and beauty sector is apparently the worst of all affected when it comes to paying its employees the minimum wage.
Based on the information above, it shouldn’t be a huge surprise that HM Revenue and Customs (HMRC) is now targeting the hair and beauty industry to admit to its mistakes, and rightfully pay their employees. The AAT is now imploring accountants that have hair and beauty clients to step up and do the right thing.
Accountants have a duty to inform their clients that HMRC, with assistance from National Hairdressers’ Federation and the Hair and Beauty Industry Authority, is targeting employers who are paying their employees inadequately. At the end of the day accountants can’t make their clients do anything, but they can take responsibility by educating them of the campaign, and of the consequences that will occur if advice is not heeded.
As a rule of thumb employers should be aware of what the minimum wage is in their industry. If by chance they are not aware of this HMRC is more than happy to provide advice and guidance on this topic. HMRC will provide amnesty to employers if they immediately correct their mistakes. However, this amnesty will not last long and if employers continue to take advantage of their employees they will be publicly ‘named and shamed’ and can face a fine up to £20,000 per employee.
Any accountant who believes their clients fall into this category should urge them to pay the correct amounts to their staff under national minimum wage legislation. Clients can also contact HMRC to get further clarification on this campaign.