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Fashion houses that exploit interns to be targeted by HMRC

Fashion houses that exploit interns to be targeted by HMRC

In addition to HMRC’s relentless campaigns to tackle tax evasion, the Revenue has also been targeting sectors that exploit interns.

The latest campaign targets designer labels and fashion houses suspected of not complying with National Minimum Wage legislation.

Fashion houses that took part in September’s London Fashion Week will be receiving a letter from HMRC reminding them that they need to adhere to regulations and pay their interns at least National Minimum Wage.

The Assistant Director for the National Minimum Wage, Michelle Wyer, said fashion houses are being given plenty of warning to put things right if they have not been sticking to the rules. Paying less than the NMW is not acceptable and firms that have been doing so should put things right now before Revenue investigators come knocking on their door.

Compliance visits will commence early next year and companies found to be breaching NMW regulations will be fined 50% of the underpayment and face possible prosecution.

There is evidence to suggest that interns are unlikely to come forward and complain that they receive less than the national minimum wage. HMRC is therefore targeting the trade sectors that are known to use interns in a bid to ensure compliance.

Ben Lyons from InternAware explained that the current system clearly breaches NMW legislation and many interns are being exploited. This exploitation is particularly rife in the fashion industry where most of the staff in some firms are unpaid interns.

However, John Miln, the UK Fashion and Textile Association’s acting chief executive, believes HMRC is picking on the fashion industry unfairly. He pointed out that the Revenue should also be addressing the problems of unpaid internships in media and political circles.

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Image: spring booties by Shandi-lee

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