About Us
Services
Address
Business Hours
We are committed to delivering the highest level of professional competence and expertise at a cost effective price. Whether you are a company, partnership, sole trader or a sub-
- Corporation Tax
- Personal Tax
- RTI Payroll
- Self Assessment
- VAT Returns
Please feel free to visit or contact us during the following times:
Monday-
*Please contact us if you require an out of hours appointment
9AM to 5PM
© 2024 Branagans Accountancy Services Ltd | Company Number: 5965462 | VAT Number: 917 8490 87
Get in Touch: 01709 327 215
BRANAGANS
Accountancy Services Ltd
01709 327 215 | info@branagans.co.uk
May 2024 | Workers receiving payment on Thursdays or Fridays might encounter additional tax obligations in 2024/25
Many UK individuals paid weekly might face increased tax burdens this year, especially if their paydays fall on Thursdays or Fridays. According to the Low Incomes Tax Reform Group (LITRG), employees receiving wages on Thursday, April 4th, or Friday, April 5th, may incur additional tax payments due to receiving 53 payments instead of the usual 52 in the 2024/25 tax year.
Even those paid fortnightly or even every four weeks could also be caught in this tax trap, which may result in HMRC looking to clawback unpaid tax.
WHY WILL THESE PEOPLE OWE MORE TAX?
HMRC allows employers to give an additional amount of Personal Allowance to the people affected, according to the LITRG. But because of this, they will have underpaid tax based on their income for the entire tax year. So, HMRC is likely to clawback this money unless it uses its discretion to not chase smaller amounts.
For those caught who are paid every two weeks or every four weeks, the amount they would need to pay back to HMRC would be larger, which could lead to difficulties if they aren't planning for the bill.
Meredith McCammond, Technical Officer for LITRG, said: "Where employees are paid weekly, the PAYE system is designed to assume you are paid 52 times a year. Each week, you get a 1/52 proportion of your tax-
"When HMRC later works 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.
"However, the amount owed could be significantly higher if you are paid fortnightly or four-
HOW WILL I KNOW IF I OWE HMRC MONEY?
At the end of each tax year, HMRC will send out what is known as a P800 which details any tax due. If you are affected by this anomaly in the 2024/25 tax year, then you would receive one of these notifications.
If you receive one, whether for this reason or any other, then you should always check with your accountant if the calculation is correct. HMRC is fallible, and it can make mistakes that cost you money. So, always double check the calculations before you make a payment to be sure that you aren't overpaying.
If you are still employed, then your PAYE code might be adjusted to take account of the money owed during the next tax year. But if you are no longer working, then you would have to make the payment to HMRC directly. Either way, you should speak to your accountant for guidance.
To be clear, anyone who is paid on any other day of the week either weekly or fortnightly, or who is paid monthly -
WE CAN HELP YOU
If you believe you might be affected by this tax scenario, please contact us on 01709 327 215 or via email at info@branagans.co.uk.
We're here to provide assistance and support.
Our Blog
