Iceland threatened with £21m tax bill over staff Christmas scheme

Iceland HMRC

Iceland could be forced to pay a £21 million bill after the HMRC accused the grocery retailer of breaking minimum wage rules over a staff Christmas savings scheme.

According to The Times, the scheme — which is voluntary — allows shop floor staff to have sums deducted from their weekly wage packets, which was then saved in a separate account and returned on demand, often around Christmas.

However, the HMRC alleges that although it was voluntary and staff recieved all the money they had set aside, their pay technically had fallen below the minimum wage.

The HMRC alleged that the underpayment was around £3.5 million a year for six years and in a worst-case scenario, Iceland might have to pay a fine that is double the amount of the alleged underpayment.

The tax authority also accused Iceland of breaking rules by informing shop floor store staff to wear “sensible shoes”, because they should be compensated for footwear they have purchased for work.

Iceland chief executive Sir Malcolm Walker told The Times that the situation was “just madness” and he was ready to fight the allegations in court if necessary.

He has also reportedly prepared a document called The Campaign for Common Sense, which highlights the extent of bureaucracy that is hampering business.

Nonetheless, Iceland is due to meet junior business minister Kelly Tolhurst in the coming weeks and Walker said he was “confident we will get a positive outcome”.

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  1. if they owe then they should pay cause any normal working class person would be in court asset froze then jail sick of these big company’s getting away with this hmrc pick on small company’s who they no haven’t got the money to fight them so make them pay and put it into the nhs

  2. The HMRC are always trying to get money out of small and big companies, I hope he takes them to court and wins, the scheme was voluntary so the staff weren’t told they had to pay into it.

  3. If the staff have given permission for money to be taken then Iceland are in no fault whatsoever. HMRC always looking to grab money off people which ever way the can. The country has gone to poop.

  4. McDonald’s don’t buy our shoes but we are told what we are not allowed to wear. Which means we have to buy our own work shoes and also if you need new uniforms we have to pay too

    • They’re breaking the law, under the health and safety act. As a company is liable to provide PPE, in order for an individual to complete their working objectives in a safe manner! They can only charge, if you leave the company, and don’t return it. This is something I’d look into deep, if I was you!

    • Macdonalds are like most of the retail/hospitality sector. You need to wear sensible shoes. Usually black, preferebly steel toed, and probably not nice looking. Most of the companies I have worked for offer them at a discount rate. My son works for maccys he gets his discounted. But even so they are not expensive.

  5. This dosnt make any sents whats so ever its a volunteer scheme that all major supermarkets do as when i work at Sainsbury a few years ago and they still have this in place today plus the footware thing is stupid as all companys ask you to wear sutibal footware and we have to claim it back of hmrc.

  6. This is ridiculous. I have a friend who worked ofr Iceland and participated in the scheme. It was entirely voluntarily and you got the money back to spend at Christmas. I’m all for HMRC pursuing companies who fall foul of min wage regs, but that isn’t the case here.

  7. We still pay our taxes on the full wage and just save what we can afford into the savings and you get the full amount back at Christmas and it saves you going into debt trying to afford Christmas. I can’t see why the company should have to pay tax on what we are voluntarily paying

  8. I wonder if they have fallen foul by deducting the savings prior to tax, i.e. From gross rather than net pay.

    If that was the case then they definitely would be in the wrong and hence could be under nmw.

  9. Iceland have done nothing wrong most big retailers do it so don’t pick on 1 company look at the bigger fish hmrc just bullies end of

  10. HMRC’s job is to enforce tax legislation and collect taxes. The appeals process is there to handle exceptional cases and set limits using the law of precedents. Both sides are foing their job and a lawful compromise, where appropriate, will be reached.

  11. I work for Iceland and I save it’s a great scheme and completely voluntary they have done nothing wrong also regarding boots you are asked if you want them when you order your uniform it’s up to you if you wish to buy your own .

  12. The HMRC should be spending its time chasing taxes from amazon, Starbucks, costa, if you don’t want to pay taxes don’t trade in the UK. no wonder the high street is struggling.

  13. Im with previous comments if done post tax deductions no problem. Also everyplace I have ever worked demands sensible shoes. So where is the problem? You hardly go to work wearing flip flops do you?.

  14. I work for Iceland and I’ve done this before. You don’t have to go into it. And using the savings scheme is a godsend, especially to single parents like myself. You get every single penny back that you learnt, just at a later date, it’s still shown on your payslip each week that’s it’s been taken and that it has gone into the scheme, and then at the end of the year you get it all back.


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