Reporting PAYE information when payments are made early at Christmas

14 October 2021

Since 2019, there has been a permanent easement for reporting PAYE information in real time where employees receive their pay earlier than usual at Christmas.

Where an employer closes on the usual (contractual) payday, such as at Christmas or on bank holidays, HMRC advises to report the contractual pay day on the full payment submission (FPS). 

An example provided for Christmas by HMRC is “if you pay on Friday 17 December 2021 but the normal (or contractual) payment date is Friday 31 December 2021, please report the payment date on the FPS as 31 December and ensure the submission is sent on or before 31 December 2021.”

The normal PAYE reporting obligation for employers is unaffected by this easement and you must still report payments on or before the date employees are paid, outside of the Christmas period. The pay date recorded on the FPS, however, should always be the contractual pay date.

Doing this will help protect any employees’ universal credit eligibility, avoiding double monthly earnings in one assessment period. Where two payments are received in one assessment period, universal credit can be reduced, as it is a means-tested benefit.

Where individuals are paid on a weekly, fortnightly or four-weekly basis there will always be occasions where more than one payment is made within an assessment period. In these instances, amending the reporting will only move the issue into a different period. 

CIPP comment

In relation to a judgment issued in November 2020, the CIPP provided evidence from the Payslip Statistics Survey. This evidence contributed to the ruling handed down and the amendment of the HMRC reporting rules, to protect those on universal credit affected by this issue. 


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