Iceland faces £21m tax bill over savings scheme

Frozen food supermarket chain, Iceland faces a £21m bill over a voluntary Christmas savings scheme.

The Christmas Club scheme allowed low-paid workers to voluntarily set aside a percentage of their earnings which would then be returned to them at a pre-arranged time, often at Christmas.

HMRC claims that Iceland was providing wages that were below the level of the minimum wage, breaching the National Minimum Wage Act 1998 (NMWA 1998).

HMRC has calculated that Iceland underpaid staff about £3.5m a year for six years, despite staff deciding to take part in the scheme and received all the money they had set aside. Iceland potentially faces a fine of up to double the amount of the alleged underpayment.

The Christmas Club scheme allowed money to be saved in a separate account and controlled by an independent trustee firm, the directors of which are not connected to Iceland.

HMRC also believes Iceland should have compensated staff for the footwear that some staff, such as those who were employed in warehouses, were required to wear to work. Iceland provides safety shoes, free of charge, for use in warehouses and these are available to employees on request.

Founded in 1970, Iceland operates over 800 UK stores with 23,000 employees. The latest operating profit from 2018 stood at £110m.

The company's latest vegan dishes for Veganuary are pictured.