If you’re planning to make early PAYE payments to staff this Christmas, do you know the rules on reporting it in real time?
Fortunately for employers, HM Revenue & Customs (HMRC) has now clarified how businesses should treat early Christmas salaries and how they should be reported under the new ‘real time’ PAYE system.
HOW TO REPORT PAYROLL OVER THE CHRISTMAS HOLIDAYS
Over the festive break, it may be appropriate to run your payroll early to accommodate for the Christmas bank holidays.
According to HMRC, employers who make early payments over the Christmas break 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.
HMRC added that by doing this, employees will retain eligibility for Universal Credit, as reporting the true payday as the payment date may affect current and future entitlements.
EXAMPLE
You normally pay your staff on the 30th of each month. However, over the Christmas period the office will be shut from Christmas to New Year’s Day.
You therefore decide to pay your employees early on Friday 20 September, in part so they will have their salary over the Christmas break and in case you need to correct any errors.
In this case, you will still report the payment date on the FPS as 30 December 2019 and ensure that the submission is sent on or before 30 December 2019.
Do you need help and advice running your payroll? Get in touch with our expert team today.
