Payroll Advice

Good Friday 2007 and Week 53 payments

Simon examines the impact of the HMRC announcement regarding payments that would normally have to be made on Friday 6th April 2007 - Good Friday.

After a high level consultation meeting between payroll industry representatives and HMRC, revised concessionary guidance has been issued which resolves the issues identified by Good Friday 2007 being the first.

HMRC have stated that:

The guidance we issued in September raised a number of practical difficulties for some employers and could lead to inconsistent PAYE deductions for employees at the beginning of the tax year. It is therefore supplemented by the guidance set out below. This will also apply when Good Friday next falls on 6 April in 2012 - This guidance does not replace or alter the existing guidance in booklet CWG2 about regular paydays falling in week 53 of the tax year.

Payment date is a non-banking day - new guidance

When a regular pay day falls on a non-banking day (Saturday, Sunday or Bank Holiday) and because of this, the payment is made on the last working day before the regular pay day, the payment may be treated for PAYE and Class 1 NIC purposes as having been made on the regular payment day.

So, payments that would have normally been paid on 6th through 9th April (tax year 2007-08,) but paid on Thursday 5 April 2007 (tax year 2006-07), may be treated for PAYE/NIC purposes as being paid on 6 April and 9 April respectively (so treated as the first tax period).

This resolves the previous HMRC position that payments being made on 5th April having to be treated as a tax week 53 and the following payment due on the 13th being treated as week 2.

Examples:

A weekly payroll which normally pays on Fridays may normally have the following payment dates across the tax year end in 2007: