By Jonathan Davies

Businesses who do not pay the National Minimum Wage or the new National Living Wage will face tougher fines, under new government plans.

The National Living Wage of £7.20, which is compulsory for over 25s, will be introduced in April 2016. And the minimum wage will increase 20p to £6.70 this month.

The government will double current fines to 200% of arrears, however this will be halved if the fine is paid within 14 days. However, fines will be capped to £20,000 per worker.

In the Times newspaper, Prime Minister David Cameron said: "The National Living Wage will only work if it is properly enforced.

"Businesses are responsible for making that happen."

The government plans to double its enforcement budget for non-payment of minimum and Living Wage, while a new HMRC team will be set up to chase criminal prosecutions.