Statutory Maternity Pay Guide for Employers (2012-2013)

Statutory Maternity Pay Guide for Employers (2012-2013)

Your employee disagrees with your decision on their SMP entitlement

Formal decisions about SMP entitlement

If your employee does not agree with your decision about their SMP entitlement, they can ask HMRC to make a formal decision. An officer of HMRC can also ask for a formal decision on entitlement.

HMRC is the first of the authorities who decide questions on entitlement to SMP. In practice, such decisions are given judicially by authorised officers of HMRC. Their decisions are given strictly in accordance with the facts and the law.

As an employer you cannot ask HMRC to make a formal decision on your behalf. However, you may ask for an informal opinion with regards to your employee’s entitlement to SMP.

Before asking for a formal decision from HMRC, your employee will be expected to have asked you for a written statement about their SMP position. They may also have discussed the problem with you.

Both you and your employee will be asked for observations in writing. Neither of you will be asked to appear before the officer making the decision. You can both give supporting evidence. In the event of an appeal, your evidence will be copied to your employee and vice versa.

The officer making the decision will send the formal decision to both of you. If the decision is that your employee is entitled to SMP, the decision will give the time limit by which you must pay the SMP. You will be given full details of your appeal rights with the notice of decision.

If either of you appeals, HMRC will notify the other party. If you appeal, the officer making the decision will try to discuss the case with you so that the appeal can be decided by agreement between you, the officer and your employee.

Any agreement reached about the payment or otherwise of SMP must comply with the appropriate legislation. If all parties are unable to agree, The Tribunals Service will consider the appeal. You both have the right to appear in person and/or be represented at the hearing.

The Tribunals Service decisions are final, except that you can appeal on a point of law, with leave, to the Court of Appeal, or in Scotland, to the Court of Session or in Northern Ireland the Court of Appeal (NI).

If new facts come to light which affect the decision, the decision will be reviewed and, if appropriate, a revised decision will be issued. There are no appeal rights against this decision. It is therefore in everyone’s interest to put all the facts before the officer making the decision in the first place.

SMP is due but not paid after a formal decision

If you fail to pay SMP within the legal time limit following a decision:

  • by HMRC that SMP is due and you make no appeal, or
  • by an independent tribunal that SMP is due at an appeal hearing

you may incur a civil penalty.


Penalties

Legislation provides that employers failing or refusing to operate the SMP Scheme correctly can incur penalties. Like those in place for PAYE or NICs these penalties are civil (not criminal).

The penalties cover the following offences.

  • Any failure by you to give your employee the required information up to a maximum of £300 and £60 for each day the failure continues.
  • The refusal or repeated refusal or failure by you to pay SMP to your employee or the payment of an incorrect amount of SMP due to either fraud or negligence could make you liable to a penalty up to a maximum of £3,000.
  • A refusal by you to allow access to your records or a failure to comply with a formal information notice both of which attract a maximum penalty of £300 and £60 for each day the failure continues.
  • A failure to keep records could make you liable to a penalty up to a maximum of £3,000.
  • The provision of incorrect information or documents, either fraudulently or negligently, in response to a formal information notice – the penalty is up to a maximum of £3,000.
  • The fraudulent or negligent production of incorrect records – the penalty is up to a maximum of £3,000.
  • The provision of incorrect information either fraudulently or negligently to your employee could make you liable to a penalty up to a maximum of £3,000.
  • Obtaining, either fraudulently or negligently, incorrect funding could make you liable to a penalty up to a maximum of £3,000.
  • Anyone who fraudulently or negligently makes an incorrect statement or declaration to establish entitlement to SMP could be liable to a penalty up to a maximum of £3,000.

Where it is considered that a penalty is appropriate it will be imposed by either an officer of HMRC or an independent tribunal, but in all cases there is a right of appeal.

The outcome of any appeal could see the penalty upheld, varied or dismissed.

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