An Employment Tribunal has found that Middlesbrough FC did not breach national minimum wage legislation after deducting the costs of season tickets from staff wages. The hearing heard that in 2016 the football club had deducted the cost of season tickets for the 2016-17 season from employees’ wages over several weeks. It was clear that staff were happy with the arrangements.

Middlesbrough FC argued, that the club was simply doing its staff a favour after they themselves had requested the money for their season cards to be spread out over multiple weeks. HMRC had issued the club with a notice of underpayment in respect of the season tickets, because in its view the practice was in breach of the Act whether or not the staff were happy with the arrangement. They argued: “(In other cases) there was no finding or even allegation that the companies had acted improperly but a strong line must be taken with them, to deter any other less scrupulous employees.”

The judge agreed that it had not paid staff less than the minimum wage. He found that the deductions made were permitted under the legislation.

Chairman Steve Gibson said: “We have maintained for two years that the position that HMRC had adopted was unreasonable, and that it was not in the public interest to pursue this matter against the club”. He added that the case was a waste of public money and was “symptomatic of a bureaucratic civil service who are out of touch with the real world”.

HMRC were unapologetic in their approach. They maintain that the legislation does not draw a distinction between breaches arising from uncertainty or mistake, and deliberate underpayment or indeed ‘underpayment’ at the employee’s request. Business Minister Greg Clark has promised to look at simplifying rules around
minimum wage legislation.

Peter Stanway, our BackupHR™ legal expert comments:

The ruling follows news in January that retailer Iceland is appealing against an HMRC decision that it had not paid the minimum wage, where staff were paying into a savings scheme. We identified this issue in our HR Alert last May in our feature National Minimum Wage Failures which included other football clubs.

Middlesbrough FC has effectively won the right to pay staff below the minimum wage by providing other benefits to them. This is an approach to be taken with extreme caution as even if it makes sense, the judgment is only from an Employment Tribunal and HMRC may well appeal and carry on with its approach.

We identified this issue in our HR Alert in May 2018 and reiterate our comment that the complexity of the minimum wage legislation and the way HMRC applies it means that some employers can make genuine mistakes.

The current approach of HMRC causes confusion for employers and employees. The policy behind the national minimum wage is to protect employees and ensure a reasonable level of income. Where an employee elects to dedicate part of their salary towards a benefit provided by their employer then tribunals may be reluctant in future to interfere with that policy, notwithstanding that the remaining income would take them below the national minimum wage. Hopefully HMRC and/or the Government will take note and clarify the situation for employers.


  • Get professional advice about staff purchasing/savings schemes
  • Ensure all working time is recorded and paid
  • Avoid making deductions that take wages below the NMW threshold
  • Conduct reviews of systems and working practices, to identify exposure

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are
doing, or call us for a free initial chat on 01480 677980.