HMRC reminds employers of what ‘payment date’ means for RTI submissions over Easter
Some of you will know this has long been a bugbear of mine….HMRC’s imprecise guidance about the importance of ‘payment date’ in the Full Payment Submission (FPS). Whilst it’s correct that sometimes it’s the same as the date you pay your employees, it isn’t always, as it’s supposed to be the ‘contractual payment date’. That isn’t always the same as the actual payment date when your due date for paying employees falls at a weekend or bank holiday. Since DWP lost a court case asking for a judicial review of the Universal Credit (UC) awarded to four single Mums that hinged on when earnings were reported for RTI, HMRC have been more alive to the crucial nature of accurate RTI reporting for UC as well as tax purposes. So, it was good to receive an article from them that they have asked to be cascaded ahead of it appearing in the April Employer Bulletin that is due out next week but which may be too late for some employers paying for April.
Don’t forget this equally applies this week. If you’re due to pay people on 6th April 2019 and pay them on Friday 5th, you must show the ‘payment date’ in the FPS as Saturday 6th or you’ll have reported in the wrong tax year!
Of course we still don’t know what we’re doing about December payments this year but we’ll worry about that another time.
Here’s what HMRC have said about Easter….
Reporting payroll when your normal payday falls on a non-banking day
The date you pay your employees will usually be agreed when they begin working for you. Typically, this could be at the end of a calendar month or on Friday each week.
It is essential that you report when you pay your employees on time and use the right payment date when doing so. Remember if you use an incorrect payment date, this could impact on your employees’ financial situation, including any income related benefits, such as Universal Credit, so it is important that you send accurate reports to HMRC on time or as soon as you able to do so.
However, there may be occasions, when you pay your employees at a different time and not on the agreed day or date. This can arise when the regular payment date falls on a non-banking day (i.e. on a Saturday or Sunday or on a Bank Holiday).
If so, a payment reporting easement applies to ensure that this payment is treated correctly for tax purposes. The date you should enter on your Full Payment Submission (FPS) will depend on when you actually pay your employees and whether this is earlier or later than their normal payday.
You may not be able to pay your employees on their regular payday during the Easter Holidays in April this year as there will be four consecutive non-banking days (19 April to 22 April 2019 inclusive).
If you would normally have paid your employees on any one of those dates, but instead will pay them early on the last working day before the Bank Holidays; then you must report your normal pay date on your FPS, for example:
When a regular payday falls on a non-banking day, but payment is made on the last working day before the regular payday.
Regular date of Payment Non-Banking Date Actual date of Payment (or earlier*) Payment date you use on your FPS
|Regular date of Payment||Non-Banking Date||Actual date of Payment (or earlier*)||Payment date you use on your FPS|
|19 April 2019||19 April 2019||18 April 2019||19 April 2019|
|20 April 2019||20 April 2019||18 April 2019||20 April 2019|
|21 April 2019||21 April 2019||18 April 2019||21 April 2019|
|22 April 2019||22 April 2019||18 April 2019||22 April 2019|
*Remember you can report these payments early in advance of the actual payment date, but we recommend you don’t submit your FPS too early – as you might need to correct it if information changes, for example an employee leaves or there is a change in an employee’s tax code.
If you decide to pay your employees on the first working day after the Easter Holidays – then you should report the payment on your FPS as if it has been paid on the regular payment day/date.
So, for example:
|Regular date of Payment||Actual date of Payment (or later*)||Payment date for FPS reporting purposes|
|19 April 2019||23 April 2019||19 April 2019 *|
|20 April 2019||23 April 2019||20 April 2019 *|
|21 April 2019||23 April 2019||21 April 2019 *|
|22 April 2019||23 April 2019||22 April 2019 *|
*We would recommend you send us your payroll submission early in these circumstances, but if you do send your FPS on a later date than the regular payment dates you must select “Late reporting reason code G”
All other payments you make on regular paydays that fall on banking days and the deductions due must be reported on or before the date of payment to your employees. There is more information on running payroll here.