There was something a little bit unusual about the 2018/19 tax year – it contained 53 pay days, instead of the more normal 52. This could have a small effect on your pay, so we’d like to explain.
Your annual tax-free personal allowance is split into 52 equal amounts and one portion is given to you each week of the year. This is because a year usually has 52 weekly pay days. However, because a year actually has 52 full weeks plus an extra day or two, every so often it works out that there are 53 pay days in the same tax year.
When a 53rd pay day comes along, there’s no tax-free allowance left to use.
How will this affect me?
Thankfully, HMRC has a process in place to stop this impacting you too much. They added an extra chunk to your 2018/19 allowance, which is then deducted from your 2019/20 allowance. It’s designed to prevent a big drop in your take-home pay in Week 53.
For most people, it means you could have ended up slightly underpaying tax in 2018/19, and paying a bit more each week in 2019/20 to balance it out. There’s nothing you need to do – it’s all taken care of automatically.
Don’t forget – most people’s personal allowance increases at the start of the new tax year anyway, so you may well find that you still pay less tax than you paid last year overall.