Christmas: Adjusting Paydays and Real Time Information (RTI) Implications

RTI Reporting Obligations

When submitting information via the Full Payment Submission (FPS), employers are required to do so on or before the payday for each pay period (as per SI 2003/2682, Regulation 67B). While the FPS does not include the actual payday, it does require the payment date – the date employees are contractually entitled to receive their wages.

Understanding Payday vs Payment Date

The payday (when employees physically receive their wages) and the payment date (the contractual entitlement date) may differ. Employers must always report the payment date as the contractual payday, even if wages are disbursed earlier. This distinction is crucial for the interaction between RTI reporting and the Department for Work and Pensions’ (DWP) Universal Credit system, which relies on accurate earnings data within specific calendar month assessment periods.

Example 1:

A company with a monthly payroll typically pays on the 30th. If the 30th falls on a Saturday (e.g., 30 November 2024), the payday is moved to the previous banking day, 29 November. However, the FPS must report 30 November as the payment date, despite the earlier disbursement.

The Impact of Christmas on Paydays

Employers often adjust paydays due to the following non-banking days during the festive season:

- Christmas Day: Wednesday, 25 December 2024

- Boxing Day: Thursday, 26 December 2024

- Northern Ireland Bank Holiday: Friday, 27 December 2024

- New Year’s Day: Wednesday, 1 January 2025

Additionally, 2 January 2025 is a regional holiday in Scotland, though not a UK-wide bank holiday.

To accommodate these holidays, HMRC introduced a temporary RTI easement in December 2018, allowing flexibility in FPS submission deadlines when paydays are brought forward. This was made permanent in 2019 and reiterated in HMRC’s October 2024 Employer Bulletin.

Reporting Obligations for Early Paydays

While early paydays alter the FPS submission timeline, they do not change the obligation to report the accurate payment date.

Example 2:

For a company that typically pays on the 30th but moves the December 2024 payday to 20 December:

- Employees are paid on 20 December.

- The FPS must report 30 December as the payment date.

- The FPS can be submitted either on or before 20 December (payday) or on or before 30 December (payment date).

On or Before Reporting Exception at Christmas

HMRC’s PAYE Manual does not explicitly outline this Christmas-specific RTI easement, and standard guidance (e.g., PAYE5055) indicates that late submissions could result in penalties. However, the annual Christmas concession ensures that FPS submissions for early festive paydays are not subject to late filing penalties or require a late reporting reason.

Outside of the festive season, the standard RTI reporting rule applies: FPS must be submitted on or before the date employees are paid.

Practical Considerations

While the Christmas easement provides flexibility, it’s advisable to submit the FPS at the time employees are paid to avoid any compliance issues. This ensures the festive season can be enjoyed without lingering administrative tasks.

Practical Tip

Employers bringing paydays forward at Christmas must carefully note the distinction between payday and payment date. Accurate reporting ensures compliance with RTI obligations and supports the correct functioning of Universal Credit. Proper planning and attention to detail can make the festive period smoother for both employers and employees.

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