The British Retail Consortium has called on HMRC to put a halt to its National Minimum Wage enforcement until a government consultation has been concluded.

In a letter sent by BRC chief executive Helen Dickinson and seen by Retail Week, the BRC said current National Minimum Wage (NMW) regulations “are no longer fit for purpose” and said it was “unreasonable” for HM Revenue & Customs to take enforcement activity against retailers that are “operating reasonable pay practices”.

The BRC said HMRC’s approach to enforcing the minimum wage is “too often focused on inadvertent breaches of the regulations by employers who have taken all reasonable steps to comply”.

It urged HMRC to freeze all enforcement action until the ongoing consultation on the subject closes on March 1.

The letter added that retail workplaces have changed significantly since the minimum wage regulations were introduced in the 1990s, and that retailers offer “unparalleled flexibility” to employees that is not currently recognised by HMRC’s enforcement team.

HMRC said it enforced minimum wage regulations in line with the law and was unable to pause or alter its activity.

A spokesman said: “HMRC enforce the NMW in line with the law and policy set out by the Department for Business, Energy and Industrial Strategy. We can only enforce the law and the rules as they stand now and are therefore not in a position to pause or alter enforcement activity on the basis that there is an open consultation.

“Once the consultation closes, the government will analyse and asses the responses to decide what, if any, action it wishes to take. It is unlikely that any changes would apply retrospectively.”

The Department for Business, Energy and Industrial Strategy opened a consultation on National Minimum Wage rules last December. It is seeking changes to NMW regulations and the “practical operation of salary sacrifice schemes”.

In January, HMRC accused Iceland of breaking minimum wage rules over its Christmas savings scheme for staff. The supermarket chain could be forced to pay a £21m tax bill as a result.

Iceland chief executive Sir Malcolm Walker said at the time the situation was “just madness” and that he would fight the claims in court, if necessary.

The next increase in the NMW is scheduled to come into effect on April 1.

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