An internal guidance note to their compliance staff published on 5 February 2016, which HMRC have now disclosed, was in use until 9 March 2016 and states the following:

“It is possible workers have heard about the Whittlestone EAT decision mentioned above and have decided they are entitled to be paid for all sleeping time. To avoid escalation of complaints, workers have to be given detailed explanations of why you consider that they do not have to be paid NMW for time spent sleeping (if that is your opinion after considering the facts).

It doesn’t matter if the worker is required to be living on the premises – just because they are required to live-in, doesn’t mean they have to be paid for all that time. Time asleep usually is not working time. There may be instances where time workers are deemed to be working even if they are sleeping but these instances are expected to be exceptional and should always be referred to OAT for an opinion before calculating arrears.”

We consider that this document provides grounds to argue that HMRC should not take enforcement action, or require self-assessment, in respect of NMW compliance regarding sleep ins for a period before 9 March 2016.   We believe it reflects HMRC’s actual practice up until at least that date and we consider they are acting inconsistently by now seeking to prosecute providers in respect of a period for which other providers, who were only paying a flat rate for sleep ins, were considered to be acting lawfully by HMRC.

This latest disclosure also highlights the ongoing inconsistency between the approach to NMW compliance for sleep ins and live-in care.  For live-in care, HMRC still appears to accept that time asleep is not working time, despite live-in carers typically being required to be present throughout the night.  We consider HMRC’s approach to live-in care can be justified because live-in work is regarded as unmeasured work where the worker is not entitled, under their contract, to be paid by reference to the time worked.  We believe HMRC need to explain why they can’t take the same approach in respect of sleep ins. Any provider subject to enforcement action, or a self-assessment requirement, ought to be asking this question of HMRC.

We would also highlight that it is apparent that HMRC have previously released incorrect documentation to us and there are certain questions we have asked that HMRC have yet to address, and we will, therefore, be making a further request.  If there are particular HMRC documents you would like sight of do let us know as soon as possible, and we will take this into account in our next request.

Further information

For further information and assistance with any NMW issues or HMRC inspections, please contact Matthew WortAnna Dabek or your usual contact in our employment team.  If you would like a full copy of the latest documents released to us, please contact Regena Hodgson.