The level of payment has been in dispute ever since an employment tribunal ruled care workers should be paid national minimum wage (NMW) for night-time sleeping shifts, rather than a flat rate payment, and that employers should rectify previous payments.

HMRC set up the social care compliance scheme (SCCS) for care providers to opt into to avoid the financial penalties and naming and shaming for failing to pay NMW for sleep-ins.

However, in July the Royal Mencap Society v Tomlinson-Blake Court of Appeal judgment overturned the tribunal’s decision, saying a flat rate payment was the correct course of action.  In response, HMRC promised employers further communication by 17 August.

It has now sent a letter informing them that it intends to continue to operate the SCCS allowing participating employers to complete a self-review, taking the judgement into consideration, and make a declaration to HMRC.

All original timeframes and requirements of the scheme remain in place, meaning employers must complete their self-review and submit their declarations to HMRC by no later than 12 months of their application to the SCCS or 31 December 2018, whichever is sooner.

All non-sleeping time arrears must be paid before employers return their declaration. Any sleeping time arrears must be paid to workers within three months of returning the declaration or by 31 March 2019, whichever is sooner.

The letter states: ‘Failure to adhere to the terms or timeframes of the SCCS or withdrawing from the SCCS may result in HMRC opening an investigation into your pay practices.’

The Voluntary Organisations Disability Group (VODG) says this letter, which is says is reaching a large number of social care providers, is adding confusion and raising more unanswered questions.

Steve Scown, VODG chair, said: ‘The sector is waiting for official guidance from the Department of Business, Energy and Industrial Strategy (BEIS).

‘We have worked with officials to inform the development of policy options yet are today surprised to learn that providers are opening a confusing communication from HMRC. Providers expect clarity not uncertainty from HMRC. We are calling on government to explain why HMRC have jumped the gun and acted before BEIS have issued official guidance.’

HMRC’s letter goes on to acknowledge the BEIS review of guidance in calculating the minimum wage, which it says  will be published in due course, at which points its SCCS employer guide will be updated.

The letter states: ‘If, during the course of your review you assess there has been an underpayment of NMW, either for any sleep-in-shifts or for other reasons, HMRC will continue to allow social care sector employers to deal with the tax implications of these arrears using the alternative PAYE arrangement (APA). 

‘If you choose to use the APA you must send your completed return to us no later than 5 April 2019. 

‘If you would prefer not to use the APA, you will need to operate PAYE using existing RTI rules.’

Report by Pat Sweet