A change to the existing national minimum wage (NMW) regulations and how they apply to Travel and Subsistence schemes would not be the best solution, according to Brian White, tax partner with accounting firm Deloitte.

In the pre-Budget report, Chancellor Alistair Darling announced there would be a consultation on changes to NMW rules and how they fit in with schemes that give tax relief for travel and subsistence.

White told Recruiter: “Depending on the proposed changes, this would probably have a very significant negative impact on the many thousands of workers HM Revenue & Customs [HMRC] and the NMW are looking to protect from exploitation. Indeed this would also have a negative impact on many workers earning considerably more than the NMW.”

He outlined that well-designed schemes, which benefit the interests of the workers, would have the following key features:

· the scheme will be optional for the employees
· the scheme will guarantee a significant increase in the take home pay of the worker
· the scheme will not adversely affect the workers’ entitlement to earnings-related social security benefits, including pension, jobseekers allowance, SSP [statutory sick pay] or SMP [statutory maternity pay]
· the scheme will comply fully with all current HMRC and NMW regulations
· the scheme will have been reviewed by both HMRC and NMW
· the scheme will be subject to an annual audit by a reputable firm of accountants

White calculates that in these schemes, each of the employees will often be at least several hundred pounds each year better off in take home pay. “They are not therefore being exploited at all,” he told Recruiter.

With poorly-designed schemes, he believes that HMRC already have significant powers to enforce both the Travel and Subsistence and the NMW regulations. “Indeed, the HMRC’s NMW enforcement powers have very recently been enhanced,” he says.

“As the last HMRC consultation on travel schemes concluded that the appropriate solution was effective enforcement, I see no reason why the latest consultation should not come to the identical conclusion (of enforcement of the existing regulations) vis à vis any NMW issues.”