A FOOTBALL club which ran a payroll deduction scheme allowing employees to buy season tickets has lost an appeal and must make up the short fall in wages so they meet the national minimum wage.

Middlesbrough Football Club ran the scheme, which allowed employees to agree to buy football season tickets by instalments.

HMRC issued enforcement notices against the club because in some cases, these deductions took the pay received by employees below the national minimum wage, and said it would have to make up the shortfall of wages and pay statutory penalties.

The club had successfully challenged the notices at an employment tribunal last year, arguing that the staff had requested the deduction to help spread the payments for the season tickets.

But that decision has now been quashed.

A spokesman for Middlesbrough Football Club said: "We are disappointed by the outcome.

“This was never about the money, it was about the principle of the matter and about what we did to support our employees.”

Barrister George Rowell, from Exchange Chambers, which represented HMRC in the employment tribunal and Employment Appeal Tribunal, said: “This judgment brings a welcome clarification to an area of law which was thrown into confusion by the decision of the Middlesbrough employment tribunal last year. It upholds the fundamental principle that employers are responsible for complying with the minimum wage rules and are barred from contracting out of them except in very limited circumstances.

“Payroll deductions which take pay below the minimum wage are allowed only within clearly defined statutory exceptions, which do not include schemes to buy the employer’s products.

“It is now clear that the law requires the money to reach the employee’s pocket before it may be used to make a purchase from the employer.

As the Employment Appeal Tribunal held, this approach serves the minimum wage’s purpose of protecting low-paid employees and avoids the need for extensive investigations as to whether the employee exercised a genuine choice about making the purchase or not.”

Last year, Boro chairman Steve Gibson said HMRC's decision to pursue the case was a waste of public money.