HMR&C clarify “week 53” payments

There are 52 weeks in a year—OR ARE THERE?????? Employers who pay their employees weekly, fortnightly or 4 weekly, instead of monthly, may end up making an extra payment to their employees at the end of the tax year (5th April). HM Revenue & Customs call these additional payments week 53 payments and there are special PAYE rules relating to them.

The trouble is that HMR&C considers week 53 payment as non-cumulative payments to be treated in isolation and PAYE tax is therefore deducted without taking any account of previous pay and tax details. This may well result in an underpayment of tax as the non-cumulative tax code (week 1) gives the employee extra personal allowances.

It is also important to ensure that the week 1 tax code is only applied to the week 53 payment and not used to adjust the final tax code for the tax year as a whole.

If you have any queries about week 53 payments then please do not hesitate to contact the payroll department here at Balance.

This article was compiled by Ashley Barrowclough, partner at Balance Accountants.

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