Employers and employees that are paid weekly, bi-weekly or four weekly and whose final payday of the 2017-18 tax year falls on 5 April 2018 are reminded that there is a possibility that they may underpay tax for the current tax year. This can happen where
a ‘week 53 payment’ is received.

As the calendar year is made up of 52 weeks and 1 day (or 2 days in a leap year), it is possible for an extra payday to occur for employees that are paid weekly (week 53), two-weekly (week 54) or four-weekly (week 56), and their last payday in the tax year
falls on 5 April (4th or 5th April in a leap year).  This anomaly doesn’t apply to employees that are paid monthly.

These payments can result in an underpayment of tax as the employee in effect receives extra personal allowances. The amount of extra ‘tax free pay’ can be as high as 4/52 of the personal allowance for employees that are paid every four weeks. This means
that you might need to make a ‘week 53’ payment in the final FPS of the year.

If the payments have not been calculated correctly employees will usually receive a letter from HMRC together with a form P800 Tax Calculation explaining that they owe additional tax.

Source: New feed