The Low Incomes Tax Reform Group is encouraging employees to review their tax code for 2024/25 to make sure any adjustments to their personal allowance in 2023/24 are coded out correctly. The issue arises for employees paid on a non-monthly basis who receive pay on Thursday 4 or Friday 5 April 2024. Both of these days are 53rd paydays in 2023/24, which means individuals who are paid weekly will be treated as if they have been paid 53 times rather than 52 across the year, with PAYE systems allocating them an extra 1/52 of personal allowance for the extra week.
Meredith McCammond, Technical Officer for LITRG, said: ‘When HMRC later work out how much tax these employees owe for the year compared to how much has been taken off their wages, it may show that not enough tax has been paid overall. For a basic rate taxpayer, the amount would be just under £50. As it is not significant, HMRC may choose not to collect this.’
For those paid on a fortnightly or four-weekly basis, however, the amount of tax owed will be just under £100 or £200 respectively – amounts HMRC may well decide to collect.
LITRG urges anyone affected ‘to check any tax calculation that they receive from HMRC and to make themselves aware of how any extra tax bill will have to be paid’ – including via adjustments to their tax code.
The Low Incomes Tax Reform Group is encouraging employees to review their tax code for 2024/25 to make sure any adjustments to their personal allowance in 2023/24 are coded out correctly. The issue arises for employees paid on a non-monthly basis who receive pay on Thursday 4 or Friday 5 April 2024. Both of these days are 53rd paydays in 2023/24, which means individuals who are paid weekly will be treated as if they have been paid 53 times rather than 52 across the year, with PAYE systems allocating them an extra 1/52 of personal allowance for the extra week.
Meredith McCammond, Technical Officer for LITRG, said: ‘When HMRC later work out how much tax these employees owe for the year compared to how much has been taken off their wages, it may show that not enough tax has been paid overall. For a basic rate taxpayer, the amount would be just under £50. As it is not significant, HMRC may choose not to collect this.’
For those paid on a fortnightly or four-weekly basis, however, the amount of tax owed will be just under £100 or £200 respectively – amounts HMRC may well decide to collect.
LITRG urges anyone affected ‘to check any tax calculation that they receive from HMRC and to make themselves aware of how any extra tax bill will have to be paid’ – including via adjustments to their tax code.
