Business basics — answers to your common retail problems

Minimum wage
Question Due to an oversight, we have been paying some of our employees less than their legal entitlement for a long period of time. I am now worried about having to face court proceedings and large penalties.

Answer Until now employers who have not kept up-to-date with increasing wages have not been penalised financially, provided they have paid what is owed on realising their error. However, fixed penalties are due to be brought in soon, which is one reason not to delay rectifying your situation.

The current minimum hourly wage for adults is £5.35, and this is set to rise to £5.52 in October.

VAT exclusive
Question A competitor in a nearby town is giving no clear indication to his customers that the prices of the goods displayed in his store are not inclusive of VAT. Is he acting unfairly?

Answer You are right to be concerned. First, this practice is almost certainly affecting your business and second, your competitor appears to be breaking the law. The selling price or unit price of any goods for sale by retail in the UK must be indicated “in such a manner as to be inclusive of any VAT or other tax relating to those goods”.

Displaying a notice informing customers that VAT will be added is not sufficient.