Huge rise in workers tipping off HMRC about bosses underpaying staff

17th April, 2026 | News

Reports of employers failing to pay the national minimum wage have risen sharply, with experts warning the trend could worsen as financial pressures on businesses increase.

Data obtained by TWM Solicitors through a Freedom of Information request shows that HM Revenue and Customs received 7,622 tip-offs in the past year from workers claiming they were underpaid. This marks a significant increase from 1,656 reports recorded in 2020/21, highlighting growing awareness and willingness among employees to speak out.

Following these complaints, HMRC launched 1,137 investigations and issued 335 penalties, totalling £2.4 million. This represents a rise in enforcement activity compared to the previous year, when 911 investigations led to 332 penalties worth £1.7 million.

The increase comes as the national minimum wage rates were adjusted upward earlier this month. Workers aged 21 and above now earn £12.71 per hour, while those aged 18 to 20 receive £10.85, and younger workers and apprentices earn £8 per hour. Analysts say these changes, combined with rising operating costs, may lead some employers to fall short of compliance.

According to Andrew Peters of TWM Solicitors, many businesses—particularly in sectors such as retail and hospitality—are under pressure to manage payroll expenses. He noted that violations are not always intentional, as deductions for uniforms, travel, or meals can inadvertently reduce pay below the legal threshold. Similarly, errors in recording working hours, such as rounding clock-in times or failing to account for overtime, can lead to underpayment.

Employees who suspect they are being underpaid are advised to review their contracts, payslips, and working hours carefully, and raise concerns with their employer. If unresolved, they can file a formal complaint, take the matter to an employment tribunal, or report the issue directly to HMRC for investigation.