Workers who are paid on a Friday may face an additional tax demand in the future due to the PAYE regulations

The quirk of a 53rd week in the 2023/24 tax year could lead to a tax adjustment for some weekly paid workers in the UK, according to leading tax and advisory firm Blick Rothenberg.

The PAYE system typically spreads an individual’s annual tax allowance (£12,570 for 2023/24) across 52 weekly paychecks. However, Blick Rothenberg explains, “the quirks of the calendar mean that there is a 53rd pay week in a tax year, such as in 2023/24 for those paid on a Friday.” In these cases, employers may include an “extra personal tax allowance” in the final paycheck to maintain a similar take-home amount.

It’s important to note, as Blick Rothenberg clarifies, that this “extra personal tax allowance is purely for payroll purposes and will be ‘removed’ when HMRC reviews someone’s overall tax position at the end of the year.” This review may result in a revised tax code for the following year or a P800 tax demand to recover any “excess tax relief” received due to the 53rd pay period.

Unfortunately, as Blick Rothenberg acknowledges, “there is little that a taxpayer can do directly in this situation.” The key takeaway, as the firm emphasizes, is for taxpayers to be prepared for a potential tax adjustment.

The impact of this adjustment will vary depending on income level and pay date. Blick Rothenberg highlights that “someone who is paid on a Monday, Tuesday or Wednesday each week should not be impacted by this issue.” Similarly, “those whose annual earnings are always below the personal tax allowance threshold of £12,570” are unlikely to face any problems.

However, for those typically liable for PAYE each week, the additional tax could be significant. Blick Rothenberg offers examples, stating that “a 20% taxpayer might need to find almost £50 to pay back to HMRC, whilst, for a 40% taxpayer, the amount could be around £96.”

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