Thanks for your comments.
My understanding is that there are three pieces of legislation which relate to holiday pay. Broadly speaking the three pieces of legislation state:
1. Holiday pay is based on the average pay for the previous 52 weeks. Until recently this “Reference Period” was 12 weeks.
2. Holiday pay should be paid at a rate equal to or greater than the national minimum wage (NMW)
3. An employee should not be disadvantaged financially if they take a holiday.
My issue is that in my situation, scenarios 2 and 3 contradict scenario 1
I started working for my employer on April 1st 2022 on the NMW of £9.50. On April 1st 2023 the NMW increased to £10.42. I took a holiday in the second week of April 2023.
My holiday pay was based on my average hourly rate over the previous 52 weeks ie £9.50.
This calculation complies with point 1 above but obviously contradicts points 2 and 3. I have spoken to ACAS and their advice was that I need to take my case to an Industrial Tribunal for a decision. I find this hard to believe. Surely HM government anticipated this situation when it increased the reference period from 12 to 52 weeks. I do not relish the idea of appealing to an Industrial Tribunal and would consequently appreciate your opinion.
My questions are:
• Is my understanding of the legislation correct?
• Has my employer calculated my holiday pay correctly?
• Which piece of legislation takes priority?
I would be most grateful for any opinions on my query. Thanks
Thank you HMRC Admin 25 for your prompt reply. However I am still confused I'm afraid.
You have written: "The HMRC figure will be based on your entitlement up to and including 05/04/2023."
As I wrote above, my last pension payment in tax year 2022/23 was on March 11th,2023. Do you mean that I will be taxed on my entitlement between 12th March and 5th April in tax year 2022/23 even though I did not receive payment of this entitlement until April 11th ie: in tax year 2023/24?
This seems at odds to the way monthly salaries are taxed ie when someone works in April, the hours worked in April are typically paid at the end of April . The pay will include days worked before and after 5th April and are included in the calculations for the new tax year.
I am currently PAYE. I have a part time job and an employer's pension. I have spoken to HMRC and DWP on a number of occasions to try and resolve this issue.
HMRC have said they cannot change the pension paid figure as DWP feed the figure directly into the HMRC computer.
At my request DWP have sent me a BR735 which shows a third figure based on my pension from 23 September 2022 to 11th April 2023. Apparently this later date is used as my pension uplift commenced on 12th April 2023. DWP also told me that the tax year dates they use are based on when the uplift in pension starts and not the HMRC tax year dates.
Could you provide more clarification please. Thank you.
Hi, could someone provide a simple explanation of how the state pension income tax is calculated date wise as I have phoned DWP and HMRC and have received conflicting answers.
I turned 66 on September 23rd 2022 and received my first part payment of my pension on 30th September and my first full payment on 28th October. I then received a further 5 payments the last of which was on 17th March 2023. I thought the sum of these payments would be my state pension income for 2022-23 for tax purposes.
However, I have been advised differently.
The DWP say I should include the payment I received on 14th April 2023 in my tax return for 2022-23 as it was paid at the old pension rate before the 2023 uplift to £203.85. Apparently the DWP use different dates for the start and end dates of the tax year.
Another DWP person advised I should include the 3 weeks accrued (but unpaid) pension up to April 5th 2023 in my return for 2022/23.
Can anyone advise which on the above scenarios is correct