Salary advances: change to reporting rules
Where an employer makes part of a salary payment to an employee early, strict rules dictate when this must be included in the payroll real time information reporting. A recent change has relaxed the rules – what do you need to know?
Up until recently, the rules regarding reporting an advance on earnings required employers to submit an additional full payment submission (FPS) to record them on the day the advance was made. As this created an additional administrative burden, both for the employer and HMRC, as well as increasing the likelihood of Universal Credit errors, the requirement has been changed.
For pay periods falling after 6 April 2024, the advance can be reported on the FPS that covers the contractual payment date. This is the case even if the contractual payment date is in a later tax year. The change means the requirement for extra FPS submissions is removed.
It is important to note that this only applies to “payments on account of earnings”, rather than employer loans, e.g. for season tickets – even though these may be repaid via a deduction of salary each pay period.
Related Topics
-
Flat rate scheme: join now or never?
HMRC recently published a report about the advantages and disadvantages of the flat rate scheme for a small business. Could the report lead to the abolition of the scheme or a ban on new users?
-
Accelerate tax relief for the cost of equipment
You’re upgrading your company’s IT equipment as it’s now several years old. Naturally your company will get tax relief for the purchases but what’s the tax position if you sell or scrap the old equipment, and how might you improve it?
-
Opt out of winter fuel payments by 15 September
HMRC has issued new guidance on the winter fuel payments. What do you need to know?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.