Next to face HMRC investigation following payroll issues

Next is set to face an investigation by the UK’s tax authority after the introduction of a new payroll system saw thousands of its employees receive incorrect salary payments.

HM Revenue & Customs (HMRC) will be looking into whether Next had paid some of its staff less than the UK’s minimum wage, according to The Sunday Times, which had initially reported on the retailer’s payroll blunder.

Issues arose when Next sought to replace its in-house payroll system with that of Oracle at the start of 2022, the publication found, resulting in underpayments and overpayments among weekly and monthly paid staff.

Reports at the time said that many of its staff were subject to substantial financial difficulties, with some even unable to afford bus fares.

In a statement, the retailer said: “We acknowledge the frustration many colleagues have felt and reiterate our sincere apologies.”

Next reportedly confirmed the investigation was going ahead, as stated by the Financial Times, and that it has been considered a “medium-risk” corporate taxpayer.

If the retailer is found in breach, HMRC could issue penalties of up to 200 percent of money owed to employees who were paid below minimum wage.