![[UK] Early Christmas paydays may cost workers their benefits](http://globalpayrollassociation.com/cdn/shop/articles/bigstock-Christmas-Woman-Wearing-Face-M-397796678_1200x.jpg?v=1637708418)
A leading tax and business advisory firm has warned employers intending to help their staff by paying Christmas wages early could negatively impact the payments of those on Universal Credit by up to 55 per cent, iNews reports.
In the run-up to Christmas, it is common for employers to pay December salaries earlier than normal but a mistake on the dates on the electronic submissions employers make to HMRC could hit workers receiving Universal Credit, hard.
Robert Salter - a tax service director at Blick Rothenberg - said, “Employers may pay the salary for the month ended 31 December on, say, the 17 December rather than the traditional last working day of the month, because of office closures and to assist employees from a cashflow perspective; which is a nice gesture, but it could go wrong.
“Such seasonal payroll arrangements are well established and perfectly legitimate, but it is important for payroll providers to get the electronic payroll submission – known as an FPS – to correctly record the period that the pay relates to.
“If, for example, using the above dates, the FPS said the earnings were purely for the period ended 17 December rather than the correct date of 31 December, this could impact the universal credit entitlement of those employees who are in receipt of this benefit.”
Mr Salter added that it was a common error for employers and their payroll teams to make but one that could have a “really painful impact” on those employees and their families who are in receipt of universal credit on top up their salary.
He said, “In broad terms, reporting the wrong pay period – and thereby artificially inflating the perceived wages of an employee, could reduce their UC support from the Government by as much as 55%. Not exactly the type of Christmas present that anybody would want this time of year.”
(Link and quotes via original reporting)
A leading tax and business advisory firm has warned employers intending to help their staff by paying Christmas wages early could negatively impact the payments of those on Universal Credit by up to 55 per cent, iNews reports.
In the run-up to Christmas, it is common for employers to pay December salaries earlier than normal but a mistake on the dates on the electronic submissions employers make to HMRC could hit workers receiving Universal Credit, hard.
Robert Salter - a tax service director at Blick Rothenberg - said, “Employers may pay the salary for the month ended 31 December on, say, the 17 December rather than the traditional last working day of the month, because of office closures and to assist employees from a cashflow perspective; which is a nice gesture, but it could go wrong.
“Such seasonal payroll arrangements are well established and perfectly legitimate, but it is important for payroll providers to get the electronic payroll submission – known as an FPS – to correctly record the period that the pay relates to.
“If, for example, using the above dates, the FPS said the earnings were purely for the period ended 17 December rather than the correct date of 31 December, this could impact the universal credit entitlement of those employees who are in receipt of this benefit.”
Mr Salter added that it was a common error for employers and their payroll teams to make but one that could have a “really painful impact” on those employees and their families who are in receipt of universal credit on top up their salary.
He said, “In broad terms, reporting the wrong pay period – and thereby artificially inflating the perceived wages of an employee, could reduce their UC support from the Government by as much as 55%. Not exactly the type of Christmas present that anybody would want this time of year.”
(Link and quotes via original reporting)