Announcement of an increase in minimum wage rate and the national minimum wage in UK 2020 by Government for three million people approximately:

Government of UK has announced after receiving recommendations from low pay commission that the full-time workers per hour rate of minimum wage 2020/21 UK will be increased from 4.5% to 6.5% and national living wage 6.2% depending upon the age of employees from 1st April 2020. Low pay commission recommended these national living wage and minimum wage UK 2020 per hour rates to the government after they consulted stakeholders like unions, businesses and academics.

April 2020: Is National minimum wage UK 2020 per hour rate and national living wage UK 2020 per hour rates going up?

  • These changes in national living wage (NLW) rates will apply to the workers those aged are 25 or above and they will receive national living wage increase by 6.2% from £8.21 to £8.72 per hour from 1st April 2020.
  • The workers aged between 21-24 will get minimum wage UK 2020 per hour increase by 6.5% from £7.70 to £8.20.
  • The workers aged between 18 to 20 years old will see their minimum wage UK 2020 per hour rise by 4.9% from £6.15 to £6.45.
  • The workers who are under 18 will see their minimum wage rise by 4.6% from £4.35 to £4.55 per hour
  • For apprentices’, the national minimum wage will increase by 6.4% from £3.90 to £4.15 per hour.

Advantages of an increase in the minimum wage UK 2020:

This increase in the minimum wage UK 2020 will reduce poverty, increase labour productivity, increase the participation rates to accept the job, increase firm’s investment level to invest and labour productivity, and will have the chances of the knock-on effect of the rise in the minimum wage for experienced workers.

As described by Prime Minister as “biggest ever cash boost for UK workers” and by Vice-chancellor of Exchequer as “We want to end low pay and put more money in the pockets of hard-working families.” So, by this increase in National living wage and national minimum wage rates, almost three million young UK workers and full-time workers can get benefits up to 930£ a year.

HMRC website: Who are not entitled to minimum wage:

You are not qualified for minimum wage according to the HMRC website if you are one of the followings:

  • Self-employed who is running his own business
  • Company directors
  • Armed forces’ members
  • Government employment program’s workers
  • Volunteers workers
  • A family member of employer and live in employer’s home
  • Au pairs or non-family members who are employed as one of the family, live in employer’s home, share in work and does not pay any charges for meals or accommodation.
  • Young workers aged between 16-17
  • Higher and further education students having work experience
  • Workers on government pre-apprenticeships schemes
  • People following others at work
  • Workers following European Union programs including Leonardo da Vinci, Erasmus, Comenius
  • People who are trial at job Centre for up to 6 weeks
  • Share fishermen
  • People working and living in a religious community

The employers need to start working with payroll departments to ensure that the new hourly rates are reflected in staff salaries and all the provided information on employees’ date of birth is correct. As any unintentional error could results in claims of unlawful deduction from wages of employees or pay to employees less than NLW and NMW and falsify the payment records of employees and consequently lead to levy fine or penalty up to £20,000 on the employer from HMRC  and ban from being a company director for 15 years for non-payment to per worker.

How can I find payroll services near me to avoid any penalty from HMRC?

At Berkshire Accountants limitedwe provide comprehensive payroll (Pay) service which is fully compliant with HMRC regulations. This enables our clients to pay their staff salaries on time every month. So, if you want to know about our more comprehensive payroll services and find out our other services regarding accounts and taxation that we provide to our clients please click here and book the meeting with our professionals or Berkshire Accountants click here.

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