UK payroll professionals have two ultimate goals in life: To pay on time and to pay accurately.

There are greater ramifications if the payday is missed, as this is likely to be viewed as a breach of a contractual term. Plus, late payment is likely to impact the entire workforce yet it is unlikely that we would inaccurately pay the entire workforce.

There are greater ramifications if the payday is missed, as this is likely to be viewed as a breach of a contractual term. Plus, late payment is likely to impact the entire workforce yet it is unlikely that we would inaccurately pay the entire workforce.

Bacs

Whilst it is not the only way of paying the workforce, most people in the UK are paid using the Bacs Direct Credit system. Further, the Bacs Direct Credit system is also used for paying disbursements such as pensions and HMRC, supplier payments and employee expenses. Plus, the Department for Work and Pensions (DWP) pay the majority of their benefits this way.

As we approach the Festive Season 2018/19, it is absolutely essential that UK professionals in all capacities avoid missing payment deadlines over the Christmas and New Year Periods. In this regard, there are important stages that we need to keep in mind in the Bacs ‘three-day cycle’.

The 3 day cycle

None of these days are Input Days, Processing Days or Entry Days.  This means that, if we want to meet our goal of paying on time, we have to re-evaluate our processing deadlines, as we do at this time every year.

A further consideration is banking holidays in Northern Ireland as opposed to bank holidays.  Banking holidays are the days on which banks are closed for processing so will need to be taken into account, as  Thursday 27 December 2018 is a banking holiday for some banks in Northern Ireland (even though it is not a bank holiday).  Employers are advised to check arrangements for accounts that are held in Northern Ireland.

So, it is worth revisiting the Bacs processing calendars for 2018 and 2019.  The 2018 calendar is worth reviewing, particularly the section on the second page entitled ‘Christmas and New Year 2018/19’.  Here, the above days are renamed as follows:

  • Entry Day (3) becomes ‘Payment Arrival Date’
  • Processing Day (3) becomes ‘Processing Date, and
  • Input Day (1) becomes ‘Latest Submission Date’

The Bacs processing calendar for Christmas and New Year 2018/19 is replicated below with a red ‘*’ indicating where employers should check with their bank for accounts held in Northern Ireland:

This looks at English bank working days:

The Input Day (Day 1)

The Input Day is the latest day an employer / bureau can submit a payment file to Bacs at the start of the three-day cycle.  Payment files must be transmitted to Bacs between 07:00 and 22:30 and can be submitted up to 30 days in advance of the Entry Day / Payment Day.

The Processing Day (Day 2)

Payment details are delivered to the relevant banks and building societies to process each payment on the file.

The Entry Day (Day 3)

The Entry Day is the date on which monies to be credited to the recipient, for example payday.

The 3 day cycle in practice

We always have to start with Day 3 of the cycle, the date on which we want payment to be made.  Then, we work backwards so that we know what Day 1 is and the date by which we have to send our payment file to Bacs.  For example:

  • Payday is Friday 30 November 2018, an English bank working day (Day 3)
  • Processing Day is the English bank working day before this, i.e. the 29th (Day 2)
  • The latest Input Day is up to 22:30 on the English bank working day before the Processing Day, i.e. the 28th (Day 1)

From the above, we know that if we want to make a payment by Bacs on 30 November 2018, the latest that we can submit the payment file is 22:30 on 28 November 2018.

It’s all very simple if we remember to look at English Bank Holidays (which are the same as the ones that apply in Wales).

The 3 day cycle at Christmas 2018 and New Year 2019

Which brings me to look at the looming 2018/19 Christmas and New Year holidays which are:

  • Tuesday 25 December 2018
  • Wednesday 26 December 2018 and
  • Tuesday 01 January 2019

None of these days are Input Days, Processing Days or Entry Days.  This means that, if we want to meet our goal of paying on time, we have to re-evaluate our processing deadlines, as we do at this time every year.

A further consideration is banking holidays in Northern Ireland as opposed to bank holidays.  Banking holidays are the days on which banks are closed for processing so will need to be taken into account, as  Thursday 27 December 2018 is a banking holiday for some banks in Northern Ireland (even though it is not a bank holiday).  Employers are advised to check arrangements for accounts that are held in Northern Ireland.

So, it is worth revisiting the Bacs processing calendars for 2018 and 2019.  The 2018 calendar is worth reviewing, particularly the section on the second page entitled ‘Christmas and New Year 2018/19’.  Here, the above days are renamed as follows:

  • Entry Day (3) becomes ‘Payment Arrival Date’
  • Processing Day (3) becomes ‘Processing Date, and
  • Input Day (1) becomes ‘Latest Submission Date’

The Bacs processing calendar for Christmas and New Year 2018/19 is replicated below with a red ‘*’ indicating where employers should check with their bank for accounts held in Northern Ireland:

 

Payment Arrival Date

 

 

Processing Date

 

 

Latest Submission Date

 

 

Monday 24 December 2018

 

 

Friday 21 December 2018

 

 

Thursday 20 December 2018

 

 

Thursday 27 December 2018 *

 

 

Monday 24 December 2018

 

 

Friday 21 December 2018

 

 

Friday 28 December 2018

 

 

Thursday 27 December 2018 *

 

 

Monday 24 December 2018

 

 

Monday 31 December 2018

 

 

Friday 28 December 2018

 

 

Thursday 27 December 2018 *

 

 

Wednesday 2 January 2019

 

 

Monday 31 December 2018

 

 

Friday 28 December 2018

 

 

Thursday 3 January 2019

 

 

Wednesday 2 January 2019

 

 

Monday 31 December 2018

 

 

Friday 4 January 2019

 

 

Thursday 3 January 2019

 

 

Wednesday 2 January 2019

 

 

  • Day 3 (Payment Arrival Date) is Friday 28 December 2018 – this is the date that payment will be made
  • Day 2 (Processing Date) is Thursday 27 December 2018 (though check for Northern Ireland accounts) – the date when payment information is sent to the banks and building societies for credit the next day
  • Day 1 (Latest Submission Date) is Monday 24 December 2018 – the date by which the payment file must be sent to Bacs by 22:30

For Christmas and New Year 2018/19, please see the Bacs 2018 and 2019 processing calendars.  The 2019 calendar should be used to form processing schedules for next year – and don’t forget the banking holidays in Northern Ireland.

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