Iceland faces £21m bill from HMRC over Christmas club

Iceland could be forced to pay at least £21m as a result, according to The Times.

Iceland chief executive Sir Malcolm Walker said the situation was “just madness”. As well as the savings scheme, HMRC has claimed that Iceland broke rules by telling store staff to wear “sensible shoes”, because they should be compensated for footwear they have purchased for work.

Employees chose to have money deducted from their pay packets, which was then saved in a dedicated account and typically withdrawn at Christmas, and it is maintained that as a result their pay had technically not met the minimum wage.

It is claimed that the underpayment amounts to £3.5m a year for six years. In a worst case scenario, Iceland might have to pay a fine double the amount of the alleged underpayment.

Walker said he would fight the claims in court if necessary. He told The Times that he has prepared a document called ‘The campaign for common sense’ highlighting the extent of bureaucracy that is hampering business.

He said: ”They [HMRC] will not give in, so I went to see the business secretary Greg Clarke. He promised he would look into it – never heard from him again.”

Iceland will, however, meet junior business minister Kelly Tolhurst later this month and Walker was optimistic about a “positive outcome”.