Over the Festive Season, employers may bring forward their usual payday. Bookkeepers should not that there are RTI reporting implications that are important to get right.
It is not too early to approach your clients and ask for their payment plans over the Festive Season! Bookkeepers will need this for planning purposes and, also, it may serve as a prompt for employers to consider this.We have completed September payrolls and now attention turns future weeks and months, particularly December, noting the following non-banking days:
- Christmas Day is Wednesday (25 December 2024)
- Boxing Day is Thursday (26 December 2024)
- New Year’s day is Wednesday (01 January 2024)
See the 2024 Bacs calendar and note that 27 December 2024 is a non-banking day in Northern Ireland. Whilst 02 January 2025 is a regional holiday in Scotland, it is not a Bank Holiday.
For example, a monthly payroll that pays on the 25th would have to change anyway in December, as this is a non-banking day. However, rather than bringing it forward to the 24th, an employer may make the decision to bring this forward to, say, the Friday before the last weekend before Christmas Day.
We always need to remember that RTI filing interacts with the Department for Work and Pensions and Universal Credit.
For Bookkeepers
For payroll reporting, there is the overriding consideration that the Full Payment Submission (FPS) must be submitted on or before the date of payment. Within the FPS is a field ‘payment date’ that is used to report the date the employee was contractually-entitled to be paid. When a payday is bought forward because payment cannot be made on the contractual payday, this means two different reporting obligations.
Assume a monthly payroll that pays on the 30th of the month:
- In November 2024, the 30th is a Saturday and this is not a banking day. Employers will often bring the payday forward to the banking day before, i.e. the 29th. So:
- The employee must be paid on the 29th and the FPS must be submitted to HMRC on or before the 29th, however,
- The payment date field within the FPS must contain the date 30 November 2024, as this is the date that the employee was contractually entitled to be paid
Payday and the payment date are not the same
This does all change when payday is bought forward because of Christmas! HMRC have a permanent easement which is explained in HMRC’s October 2023 Employer Bulletin and something to expect in upcoming Bulletins and Agent Updates. There are two operational implications when bringing forward paydays because of Christmas:
