HMRC Wage Raid Payroll Checks 2026: Who Gets Visited and Why
Quick answer
Payroll compliance checks have stepped up sharply in 2026, with 389 employers named and the new Fair Work Agency investigating without complaints. Who is at risk, and the self-audit that prevents it.
Updated 27 July 2026.
HMRC minimum wage enforcement has stepped up sharply in 2026, and the press has settled on a name for it: the "wage raid". Two things changed this year. In March, the Department for Business and Trade publicly named 389 employers who had underpaid around 60,000 workers a combined £7.3 million, with penalties of over £12.6 million on top; the list included household names such as ISS, Busy Bees Nurseries, Bupa Care Services, Hays Travel and Costa. Then on 7 April the new Fair Work Agency launched under the Employment Rights Act, with the power to open investigations proactively, without waiting for a worker to complain.
For employers, that combination means payroll checks are no longer something that only happens after a disgruntled leaver phones a hotline. For workers, it means underpayment complaints now land with a better-armed enforcer, and back pay can reach back six years.
What a payroll check actually looks at
These are not dawn raids on criminal enterprises; most are data-led compliance visits triggered by discrepancies in Real Time Information (RTI) payroll submissions or by worker complaints. Inspectors typically want records for every worker near the wage floor, and the breaches they find are rarely a wrong headline rate. The classics:
- Unpaid working time: opening and closing routines, security checks, handovers, training done at home.
- Deductions that drag pay below the floor: uniforms, tools, till shortages, training-bond clawbacks.
- Missed birthday uplifts: a worker turns 18 or 21 and stays on the old band (from April 2026: £12.71 for 21+, £10.85 for 18 to 20, £8.00 under-18 and apprentice).
- Apprentices left on £8.00 after their first year when they are 19 or older.
- Unpaid travel time between appointments, the care sector's chronic failure.
- Salaried staff whose real hours push their effective hourly rate under the minimum.
If this is you, do this
| Situation | Meaning | Decision | Action |
|---|---|---|---|
| Employer with staff near £12.71/hour | Highest-risk category in 2026 | Self-audit now | Recalculate effective hourly rates including all controlled time and deductions |
| Employer received an HMRC "nudge" letter | You are already on a data list | Act before the visit | Fix and repay voluntarily; disclosure before investigation dramatically cuts penalties |
| Employer using uniform/equipment deductions | Classic technical breach | Re-test every pay period | Any period where deductions push pay under the floor is a breach on its own |
| Worker doing unpaid setup, closing or travel time | Your effective rate may be illegal | Evidence, then raise it | Log 4 weeks of true hours; raise in writing; ACAS on 0300 123 1100 if refused |
| Worker whose 18th or 21st birthday passed without a rise | Underpayment since the next pay period | Back pay is owed | Claim the difference; complaints to HMRC are free and can be anonymous |
| Ex-worker underpaid in the past | Six-year reach | Not too late | Arrears are calculated at current rates, which usually increases old debts |
What non-compliance now costs
| Consequence | Scale |
|---|---|
| Back pay to workers | Up to 6 years, at current rates |
| Penalties | Up to 200% of arrears (halved if paid promptly) |
| Public naming | Employers underpaying £500+ appear on the government list |
| March 2026 round alone | 389 employers, £7.3m arrears, £12.6m penalties |
The employer self-audit, in five steps
- List everyone paid within £1.50/hour of their age-band minimum, including salaried staff converted to hourly.
- Rebuild two recent pay periods per person from actual hours: rotas, clock-ins, travel between jobs, mandatory training.
- Subtract every deduction and worker-borne cost (uniforms, tools, DBS checks) in the period it happened.
- Check the calendar: birthday uplifts and apprentice year-one endings applied on time.
- Found arrears? Repay and document it now; voluntary correction is treated very differently from discovered breaches. Then check the employer NI position while you are in payroll: the Employment Allowance is worth up to £10,500 and the payroll calculator shows the true cost per hire.
Workers who want the exact numbers for their own situation: current rates and real take-home are in the minimum wage guide (rates are UK-wide), and the hourly wage calculator converts any rate to weekly, monthly and yearly pay.
Frequently asked questions
Can HMRC really turn up unannounced?
Compliance visits can be unannounced or short-notice, though most start as record requests or nudge letters. The Fair Work Agency's launch adds proactive, complaint-free investigations to the toolkit.
Who is most likely to be checked in 2026?
Sectors with wage-floor concentration and complex hours: hospitality, care, retail, cleaning, nurseries and construction, plus any employer whose RTI data looks inconsistent with hours or headcount.
As a worker, will complaining get me in trouble?
Complaints to HMRC can be made anonymously, and retaliating against a worker for asserting minimum wage rights is itself unlawful. Keep copies of payslips and rotas before you raise anything.
Does this affect me if I pay everyone above £13/hour?
Mostly no, but deductions and unpaid time can still drag an above-floor rate below the line in a given pay period, and apprentice rules apply regardless of your general pay levels.
Sources
Written by
Laura Michelle Davis — Chartered Tax Adviser (CTA)
ACCA · CTA (Chartered Tax Adviser) · ATT · BSc Economics, UC Berkeley
Laura Michelle Davis is a Chartered Tax Adviser (CTA) who also holds the ACCA and ATT qualifications and a BSc in Economics from UC Berkeley. She specialises in UK personal tax, covering income tax, National Insurance, self-employment and capital gains, and has built her career making complicated rules easy to follow. At TaxFly, Laura writes and edits the tax guides and explainers, checking that figures reflect current HMRC rates and that every explanation answers the question a real person is actually asking. Her goal is plain-English clarity you can trust and act on.
