COMPLIANCE
As we all know, there are several bank holidays observed over the Christmas and new year period. While this will be welcome news for many, it brings with it implications for the payroll department, in terms of submitting Bacs payments to workers and the associated deadlines. Bacs payments take three working days to clear, and bank holidays aren’t classed as working days, so it quickly becomes apparent why they could impact payroll processing deadlines. Christmas deadlines
Dates to be aware of for 2022 and 2023 The bank holidays relating to Christmas 2022 fall on 26 December 2022 (which is Boxing Day) and 27 December 2022 (this is a substitute day for Christmas day, which falls on a Sunday this year). Let’s also not forget New Year’s Day. Like Christmas, this falls on a Sunday in 2022, so the bank holiday will take place on 2 January 2023. Payroll departments who plan to pay on 24, 25, 26 or 27 December 2022 will need to ensure they bring this pay date forward to 23 December 2022, unless there’s a clause in employment contracts which stipulates alternative arrangements when the standard pay date falls on a bank holiday. This means that payments will need to be sent by no later than 21 December 2022, to ensure money is in workers’ bank accounts by 23 December 2022.
Real time information reporting As many employees will pay their employees earlier than usual over the festive period, HM Revenue and Customs (HMRC) recognised this, and in 2019, introduced a permanent easement on reporting pay as you earn information in real time. Businesses who are paying early need to ensure the normal (or contractual) payment date is recorded on their full payment submission (FPS) for December, and not the earlier pay date observed in December. The FPS must be submitted on or before the normal payment date. Taking this step will guarantee that employers help to protect employee eligibility for universal credit, as reporting an early payment date could have an impact on entitlement to payments made to workers. HMRC refers to this in several of its Employer Bulletins . An example of this is here, in the October 2022 issue: http://ow.ly/NU1l50LCyyB. Example: An employer pays staff on 23 December 2022 but would have ordinarily paid them on the 25th of the month, so 25 December 2022 would be the normal pay date. The pay date recorded on the FPS should be 25 December 2022, and the FPS must be sent on or before 25 December 2022. Please note, this FPS filing easement only stands for the Christmas period.
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| Professional in Payroll, Pensions and Reward |
Issue 76 | December 2021 – January 2022 Issue 86 | December 2022 – January 2023
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