Contact Us

Use the form on the right to contact us.

You can edit the text in this area, and change where the contact form on the right submits to, by entering edit mode using the modes on the bottom right. 

Pod 6, The Engine Rooms, Station Road
Chepstow
Monmouthshire

01633 730907

For more than 10 years we have provided companies of all sizes and in a variety of sectors with uncomplicated, innovative and affordable human resources advice and on-site support ensuring that your people are an asset to your company and not a liability.

News

With the National Minimum Wage (NMW) now almost fifteen years old, and with another increase pending on 1st April 2017 HMRC have issued a list of the most elaborate excuses they've been given by employers for not paying the appropriate rates:

National Minimum/Living Wage - HMRC Clarification

Alan Kitto

Hi, I wanted to share a useful clarification following a discussion with HMRC earlier today regarding the conversion of hourly National Minimum Wage (NMW) and National Living Wage (NLW) rates into annual salaries and vice versa.

HMRC have confirmed that, as a matter of practice, when converting an hourly rate into an annual salary, employers should use 52.143 weeks per year (or 52.286 weeks in a leap year). This reflects the fact that a calendar year contains 365 days (366 in a leap year), which is slightly more than 52 weeks.

By way of example, for a worker aged 22 working 40 hours per week, the current National Living Wage of £12.71 would equate to:

£12.71 × 40 hours × 52.143 weeks = £26,509.50 per annum (£12.71 x 40 hours x 52.286 = £25,582.20 in a leap year)

This approach ensures that annualised salaries fully reflect the total number of working weeks in a calendar year.

It is important to note, however, that this methodology is not explicitly set out in HMRC’s published guidance or legislation. Instead, it has been confirmed verbally as HMRC’s preferred approach when deriving an annual equivalent from an hourly rate.

Separately, employers should be aware that National Minimum Wage compliance is assessed by reference to pay periods (e.g. weekly or monthly), not annually. As such, while the above calculation is helpful for setting salary levels, it does not replace the need to ensure that workers receive at least the applicable NMW/NLW for all hours worked in each pay reference period.

If you would like us to review your current salary structures or check compliance with NMW requirements, please do get in touch.