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NMWM14070 | After Notice of Underpayment issued: overpaid penalties

From HM Revenue & Customs · National Minimum Wage Manual

Relevant legislation

The legislation that applies to this page is as follows:

  • Employment Rights Act 2025, section 113

General

A National Minimum Wage penalty can be overpaid when:

  • An employer accidentally pays too much;

  • A notice is withdrawn and/or replaced and the employer has already paid some or all of the penalty;

  • The penalty is varied at appeal by a Tribunal.

The action taken by HM Revenue & Customs will be in accordance with the repayment policy for overpaid penalties (NMWM14250).

Penalty overpaid in error

If the employer was entitled to pay only 50% of the penalty (NMWM14050) but pays more than this in error, any excess will be used by HM Revenue & Customs Debt Management and Banking as payment towards other outstanding debts owed to HM Revenue & Customs by that employer. If the employer has no other outstanding HM Revenue & Customs debts, or there is an excess amount after HM Revenue & Customs debts have been recouped, then any excess will be repaid to the employer. There is no interest added to the refund of the penalty in these circumstances.

Penalty overpaid following the withdrawal/replacement/non-replacement of a notice

If a penalty shown on the original notice is either varied or not imposed by the replacement notice, then you must advise your nominated SAFE Officer immediately. If the penalty has been overpaid then any amount already paid towards the penalty must be repaid to the employer with interest. The appropriate rate is set by section 17 of the Judgments Act 1838 and is the rate in force on the date the penalty was originally paid (NMWM03090).

Penalty paid in full but varied at appeal by a tribunal

When a Notice of Underpayment is appealed the collection of the penalty is suspended until the result of the hearing is known. If the penalty is varied at the appeal you must advise your nominated SAFE Officer immediately. If the penalty has been overpaid then any amount already paid towards the penalty must be repaid to the employer with interest. The appropriate rate is set by section 17 of the Judgments Act 1838 and is the rate in force on the date the penalty was originally paid (NMWM03090).