As we approach Christmas 2025 and New Year 2026, it’s time for employers and employees in England, Wales, Scotland, and Northern Ireland to plan for bank holidays and understand payroll obligations, including the importance of accurate Real Time Information (RTI) reporting to avoid Universal Credit disruptions.
Bank Holidays: England and Wales
For 2025, Christmas Day (Thursday, 25th December) and Boxing Day (Friday, 26th December) are official bank holidays, followed by New Year’s Day (Thursday, 1st January 2026). As these fall on weekdays, no substitute days are needed, ensuring a straightforward holiday schedule for workers and businesses.
Scotland’s Festive Variations
Scotland aligns with England and Wales for Christmas Day and Boxing Day but includes an additional bank holiday on 2nd January 2026 (Friday).
Northern Ireland
Northern Ireland mirrors England and Wales for Christmas Day, Boxing Day, and New Year’s Day, with no substitute days required.
Holiday Pay: Know Your Rights
Under the Working Time Regulations, employers are not obligated to provide paid leave for bank holidays. However, they may include them within the statutory 5.6 weeks (capped at 28 days) of paid annual leave. For irregular hours workers, holiday pay depends on the system in place:
- Accrual-Based Workers: Holiday entitlement is based on hours worked, and taking Christmas as paid leave uses accrued hours.
- Rolled-Up Holiday Pay: Workers receive holiday pay in each pay period, so no additional payment is due for bank holiday leave. Some employers offer enhanced contractual entitlements, specifying extra pay for holidays like Christmas Day or New Year’s Day. Check your contract and discuss with your employer to clarify expectations.
Paying Early? RTI Reporting Matters
Many businesses pay employees early in December due to festive closures. HMRC’s permanent easement (since 2019) requires employers to report the normal or contractual payment date on their Full Payment Submission (FPS), not the early payment date. For example, if you pay on 20th December but the usual date is 31st December, report 31st December and submit the FPS by that date.
This is critical for employees on Universal Credit (UC), as UC payments are assessed monthly based on the date they applied for benefits. Reporting an early payment date can lead to reduced or no UC payments in the next period, causing financial distress. Accurate RTI reporting ensures employees’ benefits remain stable.
Plan Ahead
Employers should communicate holiday and payroll policies clearly, especially for irregular hours workers. Review HMRC’s guidance on RTI reporting and holiday entitlement to stay compliant.
