Employees may soon receive an unexpected tax bill from HMRC.
Workers who are paid on a weekly basis could face an unexpected tax bill due to a 53-week pay cycle, this happens due to there being 365 days in a year not 364.
This tax year due to the above and the fact its a leap year if you get paid weekly on a Thursday or Friday you will of received 53 weekly payments.
If you are paid annually above £12,570 this will likely result in an unexpected tax bill of £48.20 for basic rate tax payers & £96.40 for higher rate taxpayers.
This is a result of the tax system breaking your annual allowance of £12,570 over 52 weeks (£241.73) but as you are paid 53 times you receive and extra weekly allowance and therefore around £12,812 per year.
Unfortunately HMRC are not kind enough to let this slide and they will therefore either send you a bill for the underpaid tax or adjust for this amount in an employee’s tax code.
Employees should understand that these tax bills are not due to any error by their employer. They arise simply because of the way the system is designed.