Your tax-free personal allowance is split up across 52 tax weeks and tax weeks are periods of 7 days which follow on from each other starting on 6 April each year. So, the first tax week is 6 April to 12 April inclusive, the second tax week is 13 April to 19 April inclusive, and so on. The odd day or days at the end of the last complete tax week in the year, (5 April or in leap years, 4 April and 5 April) are treated as a whole tax week, meaning they become the 53rd tax week.
What does week 53 mean to me?
Payments with a pay date of the 4th April or 5th April are in week 53. So, for tax purposes you will still receive your personal allowance for the period but this will be on a non-cumulative basis (week 1/month 1). This means that tax is deducted without taking into account any previous pay or tax from the tax year.
However, if by allowing this additional tax allowance in week 53 in the 2023/24 tax year, you have received too much tax-free pay, HMRC will offset it by reducing the amount of tax-free pay you are allocated in the new tax year 24/25, starting Saturday April 6, 2024. Don’t worry though, this should all be taken care of automatically. HMRC will issue a tax code notification to correct it to yourself and Focused
If you haven’t utilised your tax-free allowance during 23/24 then it may result in an overpayment of tax. As a result, HMRC will send you a notice in the form of a tax calculation, also known as a P800 which will advise how to claim a refund. One thing to note is that there is no change in National Insurance calculations as they follow the usual thresholds.
Focused Umbrella – The Umbrella Company that has you covered!
As the 2023/24 tax year draws to a close, we are focused on keeping you up to date with all the important information you need to know. So, if you’re an existing Focused employee and have any questions, please do not hesitate to contact our contractor support team on 0161 923 0210 or email contractor.support@focusedgroup.co.uk
Or if you’re currently looking for an umbrella company that you can rely on to get paid on time, here at Focused we guarantee prompt, accurate and reliable payment for contractors working inside IR35, it only takes a few short minutes to register your details with us. To get in touch, simply call 0161 923 0210 or email contractor.support@focusedgroup.co.uk and we will take it from there.