5 Urgent HMRC Warnings For Christmas Workers This December 2025: Don't Lose Your Festive Pay
The festive season is a crucial time for temporary and seasonal workers, but HM Revenue and Customs (HMRC) has issued a fresh, urgent warning to ensure everyone gets paid correctly and avoids common pitfalls this December 2025. The demand for staff in retail, hospitality, and logistics surges during the Christmas period, creating thousands of short-term jobs. However, this high turnover environment often leads to payroll errors, underpayments, and an increase in sophisticated tax scams designed to exploit temporary staff and students. Checking your pay and understanding your tax position is more critical than ever to ensure your hard-earned money makes it into your bank account.
The core of the current HMRC alert focuses on two major areas: ensuring compliance with the National Minimum Wage (NMW) and National Living Wage (NLW), and staying vigilant against a rising tide of HMRC-impersonation scams. HMRC has recently highlighted significant wage arrears identified in the 2024-25 period, underscoring the real risk of underpayment for temporary staff. This comprehensive guide breaks down the five most critical checks you must perform right now to protect your festive earnings.
The Essential 5-Point HMRC Check for Seasonal Staff
Temporary and seasonal workers are entitled to the same employment rights as permanent staff, but the short-term nature of the work makes them particularly vulnerable to payroll mistakes. HMRC’s director of individuals and small business compliance has explicitly urged workers to check their payslips, confirming that the push for payroll compliance is firmly in the spotlight this year. Here are the five non-negotiable checks to make.
1. Verify Your Pay Rate Against the National Minimum Wage (NMW)
The most common issue identified by HMRC is underpayment, specifically failing to meet the statutory minimum wage rates. Temporary seasonal staff, students, and workers on short-term contracts are all entitled to the National Minimum Wage or National Living Wage, regardless of how few hours they work.
- Check Your Hourly Rate: Ensure the rate stated in your contract and on your payslip is at least the current NMW/NLW for your age bracket.
- Monitor Unpaid Hours: Be vigilant for situations where you are expected to work unpaid hours, such as working through breaks, staying late to finish tasks, or attending mandatory unpaid training. Unpaid working time can effectively push your hourly rate below the legal minimum.
- Deductions: Review any deductions, especially for things like uniforms or equipment, as these can sometimes unlawfully reduce your pay below the NMW threshold.
HMRC's enforcement efforts are robust; in the 2024-25 period, they identified wage arrears of £5.8 million due to 25,200 underpaid UK workers and issued around 750 penalties to non-compliant employers.
2. Scrutinise Your Payslip and Tax Code
Many temporary workers, especially students or those taking on a second job, often find their first take-home pay is lower than expected. This is frequently due to an incorrect or emergency tax code being applied.
- Check Your Tax Code: If you have a single job, your tax code should typically be the standard personal allowance code (e.g., 1257L for the 2025/26 tax year, though this figure can change). If you see a code like 'BR' (Basic Rate), 'D0' (Higher Rate), or an 'Emergency Code' (e.g., 1257L M1/W1/X), you might be paying too much tax immediately.
- Understand the 'BR' Code: If this is your second job, your employer may correctly use the 'BR' code, which taxes all your earnings at the basic rate because your tax-free personal allowance is already being used in your main job. While correct, it means you pay tax immediately.
- What to Do: If you suspect an error, contact your employer's payroll department immediately. If they can't resolve it, you need to contact HMRC directly to update your tax code. Remember, if you overpay tax, you can claim it back, but it's better to pay the correct amount from the start.
3. Stay Vigilant Against Sophisticated HMRC Scams
The festive period is a prime time for fraudsters who exploit the financial stress and the increased likelihood of legitimate correspondence from HMRC. They actively target taxpayers, including seasonal workers, by posing as the tax authority.
- The Fake Tax Refund Scam: This is the most common scam. You receive an email, text (smishing), or phone call claiming you are due an urgent tax refund. They ask you to click a link to a fake HMRC website to enter personal or bank details. HMRC will never notify you of a tax rebate by email or text message.
- Threatening Tactics: Scammers may use aggressive phone calls, claiming you owe overdue tax and threatening immediate arrest or legal action if you don't pay via gift cards or bank transfer. HMRC will never threaten you in this manner.
- Spotting a Phishing Email: Check the sender's email address—it will rarely be a government domain. Look for poor grammar, a sense of urgency, and requests for personal financial information.
If you receive a suspicious communication, do not click any links or reply. Forward suspicious emails to HMRC's phishing team and texts to 60599.
4. Know the Rules for Seasonal Self-Employed 'Side Hustles'
Many people take on self-employed work—often referred to as a 'side hustle'—during Christmas, such as selling crafts online, offering delivery services, or providing temporary consulting. HMRC has issued a specific warning for these workers to ensure their taxes are in order.
- The Trading Allowance: UK law states everyone has a £1,000 tax-free trading allowance. If your gross income from self-employment (before expenses) is £1,000 or less in the tax year, you usually don't need to inform HMRC.
- Registering for Self-Assessment: If your self-employed income exceeds £1,000, you are legally required to register for Self-Assessment and declare your income. Failure to do so can result in penalties.
- Record Keeping: Keep clear records of all your self-employed income and expenses. This is essential for completing your tax return accurately.
5. Check Your Pension and Holiday Entitlements
While the focus is often on immediate pay, temporary workers are also entitled to other statutory benefits that are sometimes overlooked or unlawfully denied.
- Workplace Pension: If you meet the eligibility criteria (e.g., earning over £10,000 a year and aged between 22 and the State Pension age), your employer must automatically enrol you into a workplace pension scheme under auto-enrolment rules. Even if you plan to opt out, you must be enrolled first.
- Holiday Pay: All workers, including temporary and zero-hours contract staff, accrue holiday entitlement from the first day of employment. This is typically 5.6 weeks of paid holiday per year. For short-term contracts, this pay should be calculated and paid out correctly, either as you take the holiday or as 'rolled-up' holiday pay (though the latter has specific legal requirements).
By taking a few minutes to scrutinise your contract, payslip, and any HMRC communication, you can safeguard your income and enjoy the financial benefits of your seasonal work without unnecessary tax or payment headaches. If you believe your employer is not complying with the law, you can report them to HMRC confidentially.
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