The ATT is highlighting to employers that HMRC have issued details of a special arrangement for reporting the Christmas payroll.1 This easement aims to help universal credit claimants where their employer pays them earlier than usual due to the Christmas period – without it, some claimants may find their awards reduced or stopped altogether.
The usual rule for employers is that they should report their payroll information through RTI (Real Time Information) to HMRC ‘on or before’ the date of any payment. However, HMRC guidance contains a relaxation of this rule when an employer pays earlier or later because the usual pay-day falls on a weekend or bank holiday.2 Extended arrangements for Christmas - which were first introduced last year and have now been made permanent - direct employers to use the contractual payment date on their submission to HMRC, rather than the actual pay date.
Jon Stride, Co-Chair of the ATT’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.”
Notes for editors
1. HMRC issued an Employer Update by email on 20 November which referred to information contained on page 4 of October’s Employer Bulletin.
2. Unlike the Christmas arrangements, this arrangement only applies when the employer makes a payment the last working day before or the first working day after a weekend or bank holiday – i.e. it is limited to small movements in pay-day. The Christmas arrangement is much more flexible and will apply even if payment is made a number of days in advance of the usual contractual date in December.
Details on what to do when the regular payment falls on a non-banking day can be found on HMRC guidance for 2019-20 at 1.8.
3. Employees whose universal credit claims are affected by this timing issue can find help and advice on the Low Incomes Tax Reform Group (LITRG) website.
4. The Association of Taxation Technicians
The Association is a charity and the leading professional body for those providing UK tax compliance services. Our primary charitable objective is to promote education and the study of tax administration and practice. One of our key aims is to provide an appropriate qualification for individuals who undertake tax compliance work. Drawing on our members' practical experience and knowledge, we contribute to consultations on the development of the UK tax system and seek to ensure that, for the general public, it is workable and as fair as possible.
Our members are qualified by examination and practical experience. They commit to the highest standards of professional conduct and ensure that their tax knowledge is constantly kept up to date. Members may be found in private practice, commerce and industry, government and academia.
The Association has over 9,000 members and Fellows together with over 5,000 students. Members and Fellows use the practising title of 'Taxation Technician' or ‘Taxation Technician (Fellow)’ and the designatory letters 'ATT' and 'ATT (Fellow)' respectively.
Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@att.org.uk
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