PAYE93130 - taxpayer end of year: reviewing liability at year end: payments made in tax weeks 53 / 54 / 56
When an employer makes a payment at tax week 53, 54 or 56, they
must consider if the total pay is below the Week 52 / Month 12 free
pay for the year. If it is no tax needs to be deducted from the
payment.
If the total pay is more than the week 52 / month 12 free
pay, then tax must be deducted as follows on a non-cumulative
basis
| Weekly paid – week 53 cases | Use the free pay for week 1 |
| Fortnightly paid – week 54 cases | Use the free pay for week 2 |
| Four-weekly paid – week 56 cases | Use the free pay for week 4 |
The P14 for each employee should include the total amount of pay
received and tax deducted for the full year in each case.
The extra allowances do not apply for Self Assessment or
PAYE calculation purposes. For Self Assessment and PAYE
calculations the actual pay received in a year should be used in
the calculation and the usual allowances and deductions should be
given.
The result is that making a Self Assessment or Informal Tax
Calculation in these cases will produce an underpayment. When a
calculation is made and the result is an underpayment, or the
taxpayer is required to complete an SA return, tax must be
calculated and charged as normal.
COP will try to clear these cases in the normal way when P14
details are posted to the record. In week 53, 54 and 56 cases, if
this is the only reason for the underpayment, the case should clear
automatically. If the taxpayer requests an informal calculation in
these cases, this should be issued and any underpayment collected
in the normal way.
