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Week 53 and SA liability

Week 53 and SA liability

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This will have been a problem for as long as SA has existed, but it only crossed my radar today, so I though I'd share and see if there's any mileage in taking it further.

Where an employee has a week 53 salary, they get an extra "slice" of PA to ensure the net pay remains the same.

If employee is under SA, the result is an underpayment of tax which is collectable, and HMRC internal guidance confirms this is so.

Surely there's something in a Taxes Act that says all taxpayers should be treated equally; even if HMRC try to argue that the PAYE treatment is "concessional" I struggle to see why this concession should only apply to a particular type of taxpayer?

The amounts involved are small, but it's the principle I feel miffed about.

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By dnicholson
24th Apr 2013 13:31

W53 rules

Under PAYE in W53, if the employee's pay to date (including W53) doesn't exceed their free pay for the year no tax is deducted. So in this case they aren't getting extra allowances.

If the pay is more than free pay, then W53 tax is calculated on a week 1 basis (i.e. only on the W53 pay).

PAYE rules have always been this way, so I don't think it's a concession, just different. There's another PAYE difference - the free pay itself is tax code x 10 + 9; i.e. 944L gets £9449 free pay, also different (I think) from SA.

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By K81
24th Apr 2013 13:44

...way back in 1996

... I was told that everyone is a self-assessment taxpayer (by HMRC training staff) & that anyone could be sent a self-assessment tax return at any point & would be obliged to complete it. If this is the case then there are no "different types" of taxpayer only ones that complete a tax return & ones that don't.    In a similar situation to WK 53 payments due to tax table discrepancies everyone who pays tax through PAYE actually underpays by about 80p every year, but unless you complete a self-assessment tax return or are assessed for other reasons you do not get asked to pay this back.

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By birdman
24th Apr 2013 13:53


As I see it, the "problem" for me is that an individual under PAYE but who isn't required to complete an SA Return pays less tax than one who is under SA, on the same income - the case that highlighted this for me was an employee with a rental property - lossmaking - who now owes tax for 2012-13 because of this wk 53 oddity.

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