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7 Critical HMRC Warnings Every Christmas Worker Must Know In 2025

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The festive season brings a surge in temporary and seasonal employment across the UK, but it also opens the door to costly payroll mistakes and sophisticated scams. As of December 2025, HM Revenue and Customs (HMRC) has issued a fresh, urgent warning to all Christmas workers—from retail staff to logistics personnel—to meticulously check their pay and tax details. This year’s advice is particularly focused on ensuring workers receive at least the National Minimum Wage (NMW) and avoid falling victim to common Emergency Tax Code errors that can drastically reduce take-home pay.

This comprehensive guide breaks down the seven most critical warnings from HMRC, providing actionable steps to protect your hard-earned holiday income. Whether you are a student taking on a short-term job or a migrant worker in the UK for the season, understanding these key points is essential to secure your pay, prevent underpayment, and claim any potential tax refund due to you.

HMRC's Essential Checklist for Seasonal Staff: 7 Key Warnings

HMRC's advice for temporary staff is clear: vigilance is your best defence against underpayment and payroll errors. The following points represent the core of their 2025 warning, covering everything from hourly rates to final tax claims.

  • National Minimum Wage (NMW) Compliance: HMRC is actively enforcing NMW and National Living Wage (NLW) rules. Workers must ensure their pay rate meets the legal minimum for their age bracket, and that all working time, including training and security checks, is paid for.
  • The Payslip Scrutiny Warning: The most common error is a payslip mistake. HMRC urges workers to check every item on their payslip immediately, including the number of hours worked, the correct hourly rate, and all deductions for tax and National Insurance.
  • Emergency Tax Code Risk: New or temporary workers often start on an Emergency Tax Code (like 0T or a W1/M1 suffix), which can lead to over-taxation. This is a critical point to check and rectify immediately with your employer or HMRC.
  • Unpaid Working Hours: A frequent issue in fast-paced seasonal sectors like hospitality and logistics is unpaid time. This includes time spent putting on or taking off uniforms, waiting to start a shift, or working beyond the scheduled end time.
  • P45 and P60 Management: Ensure you receive a P45 from your previous employer if you had one. If this is your only job, make sure your employer has the correct details to issue a P60 at the end of the tax year (April 5th). Incorrect forms lead to tax complications.
  • Watch Out for Christmas Scams: The festive period sees a spike in scams impersonating HMRC. Be extremely wary of unexpected calls, texts, or emails demanding immediate payment or offering a 'tax rebate' that requires you to click a link or provide personal details.
  • The P85 Form for Leaving the UK: Seasonal workers who are leaving the UK after their temporary employment must complete a P85 form to tell HMRC they are leaving and to claim any potential tax refund due to them. This is a vital step for international staff.

Avoiding the Emergency Tax Trap: What to Check on Your Payslip

One of the most significant financial pitfalls for temporary Christmas workers is being placed on an incorrect tax code, often the Emergency Tax Code. This error results in too much tax being deducted from your wages, leaving you with a smaller pay packet than you are entitled to.

The Emergency Tax Code is typically applied when an employer doesn't have a P45 from your previous job or if you haven't completed a Starter Checklist correctly.

Actionable Steps to Check Your Tax Code:

  1. Locate Your Tax Code: Check the tax code listed on your payslip. The standard, correct tax code for most employees in the UK is 1257L (for the 2025/2026 tax year).
  2. Identify the Emergency Code: If your code is 0T, W1, or M1 (e.g., 1257L W1), you are likely on an emergency code. The 0T code means you are paying tax on all your income, as you are not receiving your tax-free Personal Allowance.
  3. Contact Your Employer: Immediately inform your employer and provide them with your P45 (if you have one) or complete a Starter Checklist. They can update your tax code through the PAYE (Pay As You Earn) system.
  4. Contact HMRC: If your employer cannot resolve the issue, you must contact HMRC directly. You will need your National Insurance number and details of your employment.

Resolving an incorrect tax code quickly is crucial. While you can claim an overpayment back later, doing so in December will ensure your January and final paychecks are correct, providing you with the cash boost you need for the New Year.

Protecting Your Pay: Minimum Wage and Unpaid Hours Compliance

HMRC is particularly focused on ensuring that seasonal staff are not exploited through underpayment of the National Minimum Wage (NMW) or National Living Wage (NLW). The increased demand in sectors like retail, hospitality, and logistics makes these workers vulnerable to employers cutting corners.

Key NMW/NLW Entities to Understand:

  • Hourly Rate: Check the current NMW/NLW rate for your specific age group. Employers must pay this minimum rate for every hour you work.
  • Unpaid Working Time: HMRC has warned that employers often fail to pay for all working time. This includes time spent on mandatory training, handovers, and security searches before or after a shift. If you are required to be there, you must be paid.
  • Deductions: Deductions for uniforms, transport, or other work-related expenses cannot bring your hourly pay below the NMW/NLW. If they do, your employer is breaking the law.

If you suspect you are being underpaid, you can report it anonymously to HMRC. HMRC treats all reports seriously and has the power to issue significant fines and require employers to pay back all arrears to the affected temporary workers.

Staying Safe from HMRC Scams During the Festive Rush

The Christmas period is a prime time for fraudsters to target taxpayers, including seasonal staff, by posing as HMRC. These scams often play on the stress of the holidays and the general confusion around tax affairs.

HMRC has issued a strong warning about fraudulent letters, emails, and text messages that claim you are due a tax refund or, conversely, that you owe tax immediately.

How to Identify and Avoid HMRC Scams:

  • HMRC Will Not: HMRC will never use texts, emails, or voicemail messages to tell you about a tax refund or a penalty. They will also never demand immediate payment of a tax debt over the phone.
  • Look for Red Flags: Scams often contain poor grammar, use threatening language, or ask you to click a link to a website that doesn't look like the official GOV.UK site.
  • Self Assessment Scams: Be especially vigilant if you are a student or have multiple jobs, as you might receive a Self Assessment demand. Scammers are exploiting the complexity of this system. Over 4,800 Self Assessment scams were reported in the first few months of the 2025 tax year.
  • Official Communication: Legitimate communication from HMRC will usually be sent via post or through your secure Personal Tax Account on the GOV.UK website.

If you receive a suspicious communication, do not respond. You should forward suspicious emails to phishing@hmrc.gov.uk and suspicious texts to 60599, then delete them immediately. Protecting your personal and financial information is just as important as protecting your wages.

The P85 Form: Crucial for International Seasonal Workers

For the large number of international workers who take on seasonal employment and then leave the UK, the P85 form is a critical piece of paperwork. HMRC's guidance highlights that if you are leaving the UK to live or work abroad after your Christmas job, you may be due a tax refund.

Completing the P85 form is the official way to inform HMRC that you have left the country and to claim back any Income Tax you may have overpaid during your temporary employment.

Steps for Completing the P85 Process:

  1. Obtain Your P45: Ensure your employer gives you your P45 form when your temporary contract ends. This document is essential for the P85 claim.
  2. Complete the P85: You can complete the P85 form online via the GOV.UK website or print and mail a paper copy.
  3. Attach Your P45: If submitting a paper form, you must attach Parts 2 and 3 of your P45.
  4. Claim the Refund: The form allows HMRC to review your tax situation and process any tax refund owed to you. This is particularly relevant if you were on an Emergency Tax Code for part of the season.

Ignoring this step means you could leave a significant tax refund unclaimed, which is the final financial warning HMRC wants seasonal workers to heed. By following this expert advice and being proactive about your payslips and tax code, you can ensure your temporary Christmas job provides the financial benefit you worked so hard for.

7 Critical HMRC Warnings Every Christmas Worker Must Know in 2025
hmrc warning to christmas workers
hmrc warning to christmas workers

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