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5 Critical HMRC Warnings All Christmas Workers MUST Check Now (2024-2025)

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The festive season of late 2024 is a vital time for temporary and seasonal staff, but it’s also a period where workers are most vulnerable to pay errors and tax issues. HM Revenue and Customs (HMRC) has issued a series of urgent warnings for all individuals taking on Christmas jobs, from retail and hospitality to logistics and online side hustles, urging them to 'Check Your Pay' immediately to avoid being underpaid or falling foul of tax rules. This advisory is critical as we move into the 2024-2025 tax year, following a period where HMRC identified millions in wage arrears due to underpayment across the UK.

The primary focus of the current date: December 20, 2025 HMRC campaign is to ensure every worker receives at least the National Minimum Wage (NMW) or National Living Wage (NLW) and understands their tax obligations, especially if they are juggling multiple jobs or running a festive side business. Ignoring these five critical checks could cost you hundreds of pounds in lost wages or unexpected tax bills.

Your Essential 5-Point HMRC Checklist for Seasonal Work (2024-2025)

HMRC has intensified its 'Check Your Pay' campaign to protect the influx of temporary staff recruited for the Christmas rush. The following five points represent the most significant risks for seasonal workers this year, ranging from minimum wage breaches to sophisticated tax scams.

1. The National Minimum Wage (NMW) and National Living Wage (NLW) Check

The most frequent issue HMRC finds with seasonal employment is a failure to pay the correct minimum wage. HMRC is explicitly warning workers to verify their hourly rate against the legal minimum, which varies based on age.

  • Verify Your Rate: Ensure your stated hourly pay meets the current NMW/NLW rate for your age bracket.
  • Unpaid Working Time: HMRC warns that certain hours often go unpaid. This includes time spent on compulsory training, security searches, or opening/closing duties.
  • Commuting Time: Normal travel time to and from your place of work does not count as paid working time, but travel between different work locations during the shift generally does.

In the 2024-2025 tax year, HMRC identified £5.8 million in wage arrears owed to over 25,200 underpaid UK workers, highlighting how common these errors are.

2. Illegal Deductions and Payslip Scrutiny

Many seasonal workers focus only on their net pay, but HMRC urges a deep dive into the deductions section of your payslip. Illegal deductions can push your effective pay below the minimum wage threshold.

  • Uniform and Tools: Deductions for work-related items like uniforms, tools, or equipment are often illegal if they take your pay below the NMW/NLW.
  • Tax and National Insurance (NI): While deductions for Income Tax and National Insurance are legal, you must ensure your tax code is correct. If you have a second job, your tax code might be set to 'BR' (Basic Rate), meaning you pay tax on all earnings without your Personal Allowance applied, which could lead to an overpayment that you'll need to claim back later.
  • Payslip Requirement: By law, your employer must provide you with a payslip that clearly shows your gross pay, all deductions, and your net pay. Review this document every single time you are paid.

3. The 'Help for Hustles' Tax Warning on Side Income

The Christmas period sees a massive surge in 'side hustles'—selling handmade goods, running market stalls, or earning through online platforms (like Etsy or Vinted). HMRC has a specific 'Help for Hustles' campaign reminding these temporary entrepreneurs of their tax responsibilities.

If your total income from these side activities—known as 'trading income'—exceeds the £1,000 trading allowance in the 2024-2025 tax year, you have a legal obligation to declare it to HMRC.

  • The £1,000 Threshold: This is a gross income threshold. If you earn £1,001, you must register for Self Assessment and declare the full amount.
  • Tax Registration: You need to register for Self Assessment by 5 October following the end of the tax year (which is 5 April 2025 for the current period).
  • Record Keeping: Keep meticulous records of all sales and expenses related to your side hustle. This is crucial for calculating your taxable profit.

This warning is particularly relevant for those who might view their festive earnings as simply 'pocket money' but whose combined income pushes them into a taxable bracket.

4. Staying Alert to Festive Tax Scams

The festive season is a peak time for phishing and impersonation scams, with criminals posing as HMRC to exploit taxpayers. The warnings focus on two main types of fraud.

  • Fake Tax Refunds: Scammers send emails or texts claiming you are owed a tax refund, asking you to click a link and provide personal/bank details. HMRC will never use text messages or emails to notify you of a tax rebate.
  • Threats of Legal Action: Fraudulent calls or letters threaten immediate legal action, arrest, or a fine for an unpaid tax bill. These are designed to panic you into immediate payment or disclosing sensitive information.

HMRC's Golden Rule: HMRC will never email, text, or call you out of the blue to ask for bank details, your PIN, or passwords. If you receive a suspicious communication, do not respond, click any links, or provide information. You should forward suspicious emails to phishing@hmrc.gov.uk and texts to 60599.

5. Understanding Multiple Job Tax Codes

Taking on a second, temporary Christmas job can often lead to an incorrect tax code being applied, resulting in too much tax being deducted. This happens because your Personal Allowance (the amount you can earn tax-free) is usually allocated to your main job.

  • Tax Code 'BR' (Basic Rate): If your temporary employer uses the 'BR' tax code, it means you are paying the basic rate of tax (20%) on all your earnings from that job, with no Personal Allowance applied. This is often correct for a second job, but you may be due a rebate at the end of the tax year.
  • Tax Code 'D0': This code means you are paying the higher rate of tax (40%) on all your earnings from that job.
  • What to Do: If you suspect your tax code is wrong, you should contact HMRC directly via your Personal Tax Account online or by phone. You can usually correct this mid-year to ensure you receive the correct pay now, rather than waiting for a rebate months later.

The Importance of Payroll Compliance and Taking Action

The core message from HMRC is one of vigilance and proactive checking. The onus is on the worker to scrutinise their payslip and understand their tax position. While HMRC conducts investigations and issues penalties to non-compliant employers—around 750 penalties totalling £4.2 million were issued in the 2024-2025 financial year for minimum wage breaches—the process of recovering lost wages or overpaid tax can be lengthy.

By using the official HMRC 'Check Your Pay' resources and being aware of the £1,000 side hustle threshold, you are taking control of your financial security during the busy and often confusing Christmas period. Do not wait until January to find out you were underpaid or owe tax; check your pay today.

5 Critical HMRC Warnings All Christmas Workers MUST Check Now (2024-2025)
hmrc warning to christmas workers
hmrc warning to christmas workers

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