Iceland boss Walker slams ‘ludicrous’ HMRC probe into Christmas Club scheme

In a letter to HMRC, Walker said he is “totally shocked and amazed” that the government department is chasing Iceland for more information on the scheme “under the current conditions”.

As previously reported, Iceland has been accused by HMRC of breaking minimum wage rules around the savings scheme for its staff.

Employees can choose to have money deducted from their pay packets, which is saved in a dedicated account and typically withdrawn at Christmas.

HMRC has argued that, as a result, their pay technically does not meet the minimum wage regulations.

The department has also said Iceland broke further rules by telling store staff to wear “sensible shoes” because employees should be compensated for any footwear purchased for work.

Iceland could be forced to pay £21m as a result but has spent more than £300,000 in legal fees defending its Christmas Club and footwear policy against HMRC’s investigations.

The frozen food specialist received another email from HMRC this week, requesting additional documentation.

Sources close to the probe said HMRC wants Iceland to provide records on “tens of thousands of employees” who have participated in the Christmas Club – including some employees who have since left the business.

In his letter responding to the request, Walker wrote: “I don’t know what planet you and your colleagues are living on, but in case you hadn’t noticed here on Earth we are in the midst of an unprecedented global crisis. Iceland currently has 3,000 staff off sick on full pay. We have borne an additional £20m of Covid-related costs. Some 200 of our town centre and shopping centre stores are currently losing money.”

Walker urged HMRC to focus on making sure companies are receiving furlough payments, rather than “harassing companies that are hard at work feeding the nation”.

He added: “I think you should be ashamed of yourself in continuing to pursue this matter.”

In a separate statement, Walker said: “My letter to HMRC reflects my extreme frustration that we are still being pestered by HMRC to provide a mass of information on employees who have participated in our Christmas Club over several years, at a time when our head office is operating with a skeleton staff and all our people are focused on continuing to serve our customers and feed the nation in the face of the huge challenge of Covid-19.

“This ludicrous investigation is a complete waste of time and money for both us and the taxpayer, and the government needs to act to end it now.”