From 6 April 2024, a payment on account of salary (referred to as an advance) should be reported by employers via PAYE RTI as part of the amount paid on the normal payday, rather than reported as being made on the date advanced.  

This relaxation was announced by HMRC in the February 2023 issue of the Employer Bulletin. It is made by the Income Tax (Pay As You Earn) (Amendment) Regulations 2024) SI 2024/305 for income tax purposes, and by the Social Security (Contributions) (Amendment No.3) Regulations 2024 SI 2024/306 for the purposes of national insurance contributions.  

Practical points

This relaxation applies even if the normal payday is in a tax year later than that in which the advance was made. It also applies where the advance is made by a third-party scheme provider acting on the employer’s behalf. 

Only an advance of salary paid within the pay period and deducted from the salary actually paid is covered by this relaxation. As explained by HMRC, advances by way of loan “including long-term advances, often made for specific purposes such as the purchase of a bicycle, season tickets or moving expenses … are not considered payments on account of earnings, so fall outside the scope of this [change]”.  

Therefore, employers will need to ensure that any advance is not so large that some of it falls into the category of a loan, in which case a RTI full payments submission will be required to be submitted on or before the date of payment. 

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.