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10 Critical HMRC Warnings Every Christmas Worker Must Check In December 2025

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The festive season is a crucial time for temporary and seasonal workers, but HM Revenue and Customs (HMRC) has issued an urgent and perennial warning in December 2025: 'Check Your Pay' immediately. This advisory is specifically aimed at the thousands of individuals, including students and those taking on a second job, who are employed in the busy retail, hospitality, and logistics sectors during the Christmas rush. The core message is clear: common payroll errors and employer non-compliance can lead to significant underpayments, incorrect tax deductions, and even exposure to sophisticated scams.

The latest guidance from HMRC emphasises that mistakes in pay, especially related to the National Minimum Wage (NMW), National Living Wage (NLW), and incorrect Tax Codes, are alarmingly common for short-term contracts. Ensuring you receive the correct pay and that your tax affairs are in order is essential to protect your earnings and prevent complications when the new Tax Year (2025/2026) begins. Ignoring these warnings could mean missing out on hundreds of pounds or facing a tax bill later on.

The 10 Most Critical HMRC Warnings and Checks for Seasonal Staff

For individuals taking on temporary contracts or seasonal employment over the Christmas and New Year period, HMRC has detailed several key areas where errors frequently occur. These checks are vital for all Christmas workers to ensure correct payroll compliance and maximum take-home pay.

  • The Payslip Check: Every worker must scrutinise their payslip. HMRC urges seasonal staff to check that their name, National Insurance (NI) number, and the amount of tax deducted under the Pay As You Earn (PAYE) system are all correct. A simple error here can cause major issues.
  • National Minimum Wage (NMW) Compliance: Ensure your hourly rate meets at least the current NMW or National Living Wage (NLW) for your age group. Underpayment of the minimum wage remains a persistent issue, particularly in sectors with high turnover like retail and hospitality.
  • The Unpaid Hours Trap: This is a major focus of recent HMRC warnings. Many employers fail to pay for all working hours, including time spent on tasks like opening or closing the premises, cleaning duties, or mandatory staff training. These hours must be paid at the NMW/NLW rate.
  • The Tax Code Error (Emergency Tax): Incorrect Tax Codes are one of the biggest issues for temporary workers. If you are a student or have a second job, you may be put on an 'emergency tax' code (such as 0T), which deducts too much tax immediately. This is often because the employer doesn't have a P45 from your previous job.
  • The P45 Requirement: If you have left a job recently, you must give your new Christmas employer your P45. If you don't have one, you should complete a Starter Checklist to ensure you are taxed correctly and avoid the Emergency Tax Code.
  • Understanding Your Tax-Free Allowance: Your tax code determines how much of your income you can earn tax-free. If you only work for a few weeks, you may not earn enough to reach your annual Personal Allowance, meaning all deducted tax should be refundable. Check your code against the standard 1257L for the 2025/2026 Tax Year (for those with only one job).
  • Checking for Pension Deductions: If you are automatically enrolled in a workplace pension, ensure the deductions are correct and that you understand your right to opt out if you wish.
  • The P60 Follow-up: Although received at the end of the tax year, ensure your employer has the correct details to issue a P60, which summarises your total pay and deductions, and is essential for claiming any overpaid tax.
  • Reporting Underpayment: If you suspect you are being underpaid the NMW/NLW, you should contact HMRC directly. They can investigate your employer confidentially.
  • Vigilance Against HMRC Scams: Be extremely wary of unsolicited contact. Fraudsters often target people when they are more likely to receive correspondence from HMRC, using fake Tax Refund offers or urgent payment demands via email, text, or phone. HMRC will never use threatening language or demand payment via unusual methods like gift cards.

Avoiding the 'Emergency Tax' Trap for Second Jobs and Students

The issue of incorrect Tax Codes is highly prevalent among temporary seasonal staff, especially students or those taking on a second job to boost their income for the holidays. When an employer does not receive a P45 from a new employee, they are legally required to use a 'Week 1' or 'Month 1' basis, which can result in the employee paying too much tax upfront.

For many Christmas workers, this short-term employment is the only work they do in the Tax Year, meaning they have not used their full Personal Allowance. If you find yourself on an emergency tax code (such as 0T M1), you are likely overpaying. The good news is that overpaid tax can be reclaimed, but it requires action from the worker.

To fix an incorrect Tax Code:

  • Contact Your Employer: Provide them with your P45 if you have one, or complete the Starter Checklist accurately.
  • Use the HMRC App or Online Account: Log in to your Personal Tax Account to check your Tax Code and update your employment details. HMRC can often adjust your code immediately, and any overpaid tax will be refunded through your payroll.
  • Wait for the P800: If the issue is not resolved immediately, HMRC will automatically review your PAYE record after the end of the Tax Year (April 5th) and send you a P800 form detailing any tax refund you are due.

National Minimum Wage Pitfalls and Unpaid Work

HMRC's enforcement of the National Minimum Wage and National Living Wage is strict, and recent rounds of naming and shaming show that non-compliance is still a major issue across various sectors. Seasonal workers are particularly vulnerable to NMW underpayment due to the short-term nature of their contracts and less familiarity with employment rights.

The most common NMW pitfalls include:

  • Under-recording Hours: Employers failing to accurately record all hours worked, especially when staff are asked to stay late or come in early. This is a direct breach of the law.
  • Deductions for Uniforms or Equipment: Illegally deducting pay for items like uniforms, tools, or training costs, which can bring the worker's effective hourly rate below the NMW/NLW threshold.
  • The 'Trial Shift' Scam: Requiring new workers to complete unpaid trial shifts, which, if they involve actual work, should be paid at the minimum wage.

The Chartered Institute of Payroll Professionals (CIPP) and HMRC consistently remind businesses that payroll compliance is non-negotiable. For the worker, keeping a personal record of all shifts, start times, and finish times is the best defence against underpayment.

Protecting Yourself from HMRC Scams and Employment Fraud

As the December and January Self Assessment deadlines approach, fraudsters ramp up their efforts, often targeting temporary and seasonal workers who may be confused about their tax status or expecting a tax refund. Organised Crime Groups are also known to be active in the temporary employment agency and recruitment sector, making vigilance essential.

Key scam warnings:

  • Fake Tax Refund Texts/Emails: Be suspicious of any communication offering an immediate tax refund. HMRC does not use text messages or emails to notify you of a tax refund. These are Phishing attempts designed to steal personal or bank details.
  • Threatening Phone Calls: HMRC will never call you out of the blue demanding immediate payment under threat of arrest or legal action. If you receive such a call, hang up immediately and report it.
  • Report Suspicious Activity: If you receive a suspicious email or text message impersonating HMRC, forward it to the official HMRC phishing email address.

In summary, while the Christmas period offers great opportunities for temporary employment, the responsibility lies with the worker to be proactive. By diligently checking your payslip, understanding your Tax Code, and being aware of your rights to the National Minimum Wage and National Living Wage, you can ensure your hard-earned money is protected from errors and fraud. Take the time to make these critical checks today.

10 Critical HMRC Warnings Every Christmas Worker Must Check in December 2025
hmrc warning to christmas workers
hmrc warning to christmas workers

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