HMRC Naming & Shaming: How Employers Can Avoid Payroll Compliance Risks
In its latest “naming and shaming” list, the government identified 389 employers who failed to pay the National Minimum Wage (NMW), resulting in:
- £7.3 million repaid to workers
- £12.6 million in financial penalties
- Nearly 60,000 employees affected
Source: Chartered Institute of Payroll Professionals (CIPP) https://www.cipp.org.uk/resources/news/hmrc-release-latest-naming-and-shaming-list.html
The surprising reality: most breaches aren’t deliberate
What stands out isn’t just the scale - it’s the cause.
Many of these breaches weren’t intentional underpayment. Instead, they were the result of common payroll and HR oversights, including:
- Deductions (e.g. uniforms or salary sacrifice) reducing pay below minimum wage
- Unpaid working time (such as pre-shift preparation or travel between jobs)
- Incorrect application of apprentice rates
- Missing or delayed updates to statutory wage increases
In other words, compliance failures are often process failures - not people failures.
The real cost of getting it wrong
While financial penalties are significant, the wider impact can be even more damaging:
- Reputational risk - public naming can affect brand perception and trust
- Employee relations - underpayment can harm retention and morale
- Operational disruption - audits, investigations, and back-pay corrections
And with the upcoming Fair Work Agency expected to strengthen enforcement from 2026, scrutiny is only set to increase.
Why payroll and HR systems matter more than ever
As legislation evolves, relying on manual processes or disconnected systems creates unnecessary risk.
To remain compliant, businesses need:
- Accurate, automated payroll calculations aligned with current legislation
- Visibility of working time and pay structures across teams
- Audit-ready records for HMRC inspections
- Confidence that updates (such as NMW increases) are applied correctly and on time
How HARP Software supports compliance
At HARP, we understand that payroll and HR are not just administrative functions - they are critical compliance safeguards.
Our integrated modules are designed to help organisations:
✔ Payroll Module
- Automate wage calculations in line with current NMW/NLW legislation
- Reduce reliance on manual input and minimise risk of error
- Ensure timely updates as regulations change
✔ HR Module
- Track working hours, contracts, and employee status accurately
- Provide a clear audit trail for compliance and reporting
- Support consistent application of policies across your workforce
Compliance isn’t optional - it’s operational
The latest HMRC figures are a clear reminder that even well-intentioned businesses can fall short without the right systems in place.
As enforcement increases, organisations must move beyond spreadsheets and siloed processes toward integrated, compliant-first solutions.
Final thought
When it comes to payroll compliance, it’s not just about paying people — it’s about getting every detail right, every time.
If you’d like to understand how HARP can support your organisation in reducing risk and strengthening compliance, we’d be happy to talk. https://www.harpsoftware.co.uk/
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