In December 2018, HMRC wrote to employers to advise of a temporary easement on reporting PAYE information in real time over the Christmas period. This was put in place because many employers pay their employees earlier than usual over the Christmas period.
This can be for a number of reasons, for example during the Christmas period the business may close early or because in certain businesses employees have traditionally received their pay check early in December.
HMRC has now confirmed that following feedback from employers and the Department for Work and Pensions (DWP) this extended Christmas payroll easement is to be made permanent. If employers pay their staff early over the Christmas period, they should report their normal (or contractual) payday as the payment date on their Full Payment Submission (FPS) and ensure that the FPS is submitted on or before this date.
For example, an employer who pay staff on Friday 20 December 2019, but the normal/contractual payment date is Tuesday 31 December 2019, should report the payment date on the FPS as 31 December and ensure the submission is sent on or before 31 December.
Doing this will help protect Universal Credit claimant’s eligibility for Universal Credit as reporting the payday as the payment date may affect current and future entitlements.
HMRC is clear that the overriding PAYE reporting obligation for employers is unaffected by this announcement and remains that employers must report payments on or before the date the employee is paid, i.e. payday.