Hotelier warns many are falling foul of minimum wage legislation
A pair of Blackpool hoteliers has warned that many of those in the hospitality industry could be fined by HM Revenue and Customs for falling foul of minimum wage legislation.
Lee Tolman and Stephen Blanchard, who run the Mardi Gras Hotel in the seaside resort, were named this week by HMRC as one of 70 companies that had failed to pay staff the national minimum wage.
They were ordered to pay £3,206.76 owed to three members of staff employed at the Lord Street hotel.
However, Blanchard insisted that he and his partner Tolman had not deliberately flouted the law but that they had made ‘a genuine mistake’.
The Mardi Gras had deducted £100 per week from the wages of all its live-in staff who were provided with one-bedroom apartments within the hotel, unaware that HMRC allows no more than £34.80per week for accommodation provided in lieu of wages.
"We thought £100 a week was an acceptable amount, especially as we were providing heating, electrics, rates, water and even mobile phones," said Blanchard. "You can’t get the sort of accommodation we were providing for less than £100 a week and lots of hoteliers around here charge more. I’ve spoken to other hotels and some of them charge £150.
"I think a lot of hoteliers don’t realise there is a £34.80 limit on accommodation costs for staff."
Tolman added: "I just wish that HMRC would look more closely to other hotels and businesses in our area as we personally know of indiscretions made by other owners who do not pay staff through the books, who manipulate their year-end figures to ensure they pay less in tax and avoid VAT, and also so that they can claim working tax credits.
"This issue was a genuine error on our part, but we have since worked closely with HMRC and we have paid the back pay to the staff and our fine."
Blanchard said the hotel had amended staff wages in line with the HMRC decision, but he and Tolman were looking to sell the Mardi Gras, which they bought in 2006.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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