HMRC confirms Christmas PAYE reporting dates

HMRC is making permanent changes to the way Christmas payroll is reported to help universal credit claimants where their employer pays them earlier than usual over the festive period

There was a temporary easement on reporting PAYE information in real time announced late in December last year, but HMRC now says that following feedback from employers and the Department for Work and Pensions (DWP) it has received approval to make this a permanent arrangement.

Employers who do pay early over the Christmas period should report their normal (or contractual) payday as the payment date on their full payment submission (FPS) and ensure that the FPS is submitted on or before this date.

For example, an employer who pays on Friday 20 December 2019 but the normal/contractual payment date is Tuesday 31 December 2019, should report the payment date on the FPS as 31 December and ensure the submission is sent on or before 31 December.

HMRC advises employers that doing this will help to protect employees’ eligibility for universal credit, as reporting the payday as the payment date may affect current and future entitlements. The department notes that the overriding PAYE reporting obligation for employers is unaffected by this announcement and remains that they must report payments on or before the date the employee is paid, ie, payday.

Jon Stride, co-chair of the Association of Taxation Technician’s technical steering group, said: ‘We welcome that HMRC have issued the guidance well ahead of Christmas this year. Last year the guidance was not issued to employers by HMRC until 17 December 2018, which was too late for many employers.

‘The date of payment that employers report to HMRC can have a significant impact on the amount of universal credit received each month by their employees. Employers need to be aware of the recent guidance and consider if it will impact on their Christmas payroll.’

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