As you may already be aware, Unison have lodged an application to the Supreme Court for permission to appeal against the recent Court of Appeal decision in favour of Mencap that sleep-ins do not fall within the National Minimum Wage (NMW).
This has implications for those of you involved in the HM Revenue and Customs (HMRC) Social Care Compliance Scheme. You will have received notification from HMRC a few weeks ago to say they were putting the Scheme on hold, pending further advice. HMRC have now issued an update announcing they are to continue to operate the Scheme. Participating employers are to complete a self-review, taking the judgment into consideration, and make a declaration to HMRC. The original timeframes for the Scheme remain in place, with employers completing and submitting their self-review to HMRC by no later than 12 months after the application to the Social Care Compliance Scheme or 31 December 2018, whichever is sooner.
Furthermore, all non-sleep-in time arrears must be paid before employers return their declaration and any sleep-in time arrears must be paid to workers within three months of returning the declaration or by 31 March 2019, whichever is sooner.
So where does this leave us? From a HMRC point of view they are clearly working on the basis that this new ruling will be overturned and those of you within the Scheme will need to calculate your position regarding sleep-ins.
This seems a ludicrous position given the fact that the current ruling is that they don’t fall within the NMW. It may be that operators simply submit a nil return in respect of the sleep-in arrears of the NMW on the basis that the current legislative position is that it is not payable.
Until the issue is resolved I would encourage you to consult with your advisers on how best to proceed or contact me if you have any questions.
Colin Peacock
Business Advisor and Accountant to Nursing and Care Homes
