HMRC have issued a reminder to employers that in respect of PAYE Real-Time Information (RTI) filing, the contractual payment date should be reported rather than the actual payday. This applies whether the employees are paid early or late and is particularly likely to happen over Christmas. 

  • If employers pay their employees early or late, for example, due to a bank holiday or the Christmas holiday, they should still enter each employee's regular payday on the Full Payment Submission (FPS) as normal. The FPS should be submitted On or before the employee's payday.
  • Early reporting can directly affect an employee's claim for Universal Credit: double monthly earnings can fall in one Universal Credit assessment period.
  • This follows the Court of Appeal judgement in Secretary of State for Work and Pensions v Johnson & Ors [2020] EWCA Civ 778. 
  • Legislation in force from 16 November 2020 means that for cases affected by this issue, monthly earnings will be reallocated to another assessment period so that only one set of earnings will be taken into account rather than two when determining available allowances.

For example: if an employer pays on 17 ‌De‌ce‌mb‌er 2021 but the normal payment date is 31‌‌‌ ‌De‌ce‌mb‌er 2021, the employer should report the payment date as '31‌‌‌ ‌December 2021'. In this example, the FPS would need to be sent on or before the 31‌‌‌ ‌De‌ce‌mb‌er.

Useful guides on this topic

Employer Bulletin: October 2021
HMRC have published their Employer Bulletin for October 2021. We have summarised the key content for you, with links to our detailed guidance on the topics covered.

PAYE Real Time Information Reporting
RTI is reporting payroll almost in 'real-time' to HMRC. Employers report to HMRC electronically in advance of making any salary or wage payments to employees.

Penalties: RTI late filing and payment of PAYE
Under RTI the employer files a FPS for each payment period of the tax year and there are penalties for late filing of the various returns as well as late payment of tax.

External links

The Universal Credit (Earned Income) Amendment Regulations 2020

Secretary of State for Work and Pensions v Johnson & Ors [2020] EWCA Civ 778


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