Universal Credit - paid wages twice in AP

Robbie64

A_Lert said:

Reportedly employers can, when submitting the data to HMRC, put down the standard contractual pay day even if the actual pay day is earlier or later. But it seems like not many employers do this.

https://www.litrg.org.uk/tax-guides/coronavirus-guidance/universal-credit-and-employee-pay

The employer is actually supposed to put down the standard contractual pay day and not the day the wages are actually paid. However a high number of employers do not realise this despite it being in the guidance they have for submitting pay information to the HMRC.

HMRC have issued guidance to employers but the procedure to follow is unfortunately lost amongst a myriad of examples of how to apply it. Employers should be pointed in the direction of the guidance in 1.8 at https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2019-to-2020-employer-further-guide-to-paye-and-national-insurance-contributions--3

specifically:

When a regular payment is made early at Christmas

Regular payday on Friday 27 December 2019 (month 10) but paid Friday 20 December 2019, should be treated for PAYE purposes as being paid on 27 December 2019.

For National Insurance contributions purposes the payment must be treated as having been paid on 27 December 2019. The ‘payment date’ on the FPS should be 27 December and should be reported on or before 27 December 2019.

Doing this will help to protect your employee’s eligibility for income based benefits such as Universal Credit, as an early payment could affect current and future entitlements.

The dates of Friday 27 December (2019) and Friday 20 December 2019 are just example dates. For those two dates the OP's employer could substitute those dates for Thursday 31 December 2020 and Thursday 17 December 2020 so that the above guidance reads:

When a regular payment is made early at Christmas

Regular payday on Thursday 31 December 2020 but paid Thursday 17 December 2020, should be treated for PAYE purposes as being paid on 31 December 2020.

For National Insurance contributions purposes the payment must be treated as having been paid on 31 December 2020. The ‘payment date’ on the FPS should be 31 December and should be reported on or before 31 December 2020.

Doing this will help to protect your employee’s eligibility for income based benefits such as Universal Credit, as an early payment could affect current and future entitlements.

calcotti

tomtom256 said:

calcotti said:

So a claimant cannot give UC advance warning, they can only report the problem and request reallocation after the payment statement has been prepared? 

Yes thats how I understand it. I can only presume it's do to with how and when the RTI data is received, just in case the employer puts the paid date as the normal pay date, even though they have paid it early and/or it may be treated as an MR request.

I can see there is logic to that. Claimant knows when they received the earnings but may not know what was reported as due date to HMRC and therefore to UC. 

ginge001

Thanks everyone, hopefully it’s the case that my employer is aware and reports the supposed payment date, instead of actual. That would be the ideal scenario. 

NedS

ginge001 said:

Thanks everyone, hopefully it’s the case that my employer is aware and reports the supposed payment date, instead of actual. That would be the ideal scenario. 

You should be able to check it yourself in your online tax account with HMRC. If you haven't already got an online tax account, you can register for one online (HMRC have a nice App too). Once you log in, you can see the data your employer has reported to HMRC. For example, I am paid monthly, on the last working day of each month. My contractual pay date is the last day of the month. So I might get paid on Friday 29th but my contractual pay date is Sunday 31st. My employer normally reports to HMRC on around 22nd of each month, but importantly reports the date as the last day of the month. That is the date that appears on the RTI feed that UC will use. So, if you have an online tax account, you can check to see if your employer has reported it correctly before the end of your AP so at least you will know. Of course, if they've reported incorrectly you will still need to ask UC to correct it. UC should be well aware of this as it's a far too common mistake at this time of year with employers paying early for Christmas.

Robbie64

NedS said:

ginge001 said:

Thanks everyone, hopefully it’s the case that my employer is aware and reports the supposed payment date, instead of actual. That would be the ideal scenario. 

You should be able to check it yourself in your online tax account with HMRC. If you haven't already got an online tax account, you can register for one online (HMRC have a nice App too). Once you log in, you can see the data your employer has reported to HMRC. For example, I am paid monthly, on the last working day of each month. My contractual pay date is the last day of the month. So I might get paid on Friday 29th but my contractual pay date is Sunday 31st. My employer normally reports to HMRC on around 22nd of each month, but importantly reports the date as the last day of the month. That is the date that appears on the RTI feed that UC will use. So, if you have an online tax account, you can check to see if your employer has reported it correctly before the end of your AP so at least you will know. Of course, if they've reported incorrectly you will still need to ask UC to correct it. UC should be well aware of this as it's a far too common mistake at this time of year with employers paying early for Christmas.

Good advice NedS. I didn't realise it was possible to see this information on a online tax account. This is the sort of thing both HMRC and DWP should be publicising. If enough employees feed back information to employers then mistakes that employers make when reporting information should reduce.

ginge001

Found it in the app! That’s great to know, I’ll keep an eye on it before pay day next week to see what is reported. Thanks again!

ginge001

From what I can see they’ve been reporting actual pay dates, even though my contractual pay dates are the last day of the month. So I won’t hold my breath. 

ginge001

Update - I got in touch with my payroll department today. They said they will be reporting the actual date of 17th December. 

calcotti

ginge001 said:

Update - I got in touch with my payroll department today. They said they will be reporting the actual date of 17th December. 

Perhaps you should point them at the HMRC guidance referenced by Robbie earlier https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2019-to-2020-employer-further-guide-to-paye-and-national-insurance-contributions--3

See section 1.8.

ginge001

I sent a polite reply to them referring them to the guidance and it’s all gone quiet...