Statutory Sick Pay Guide for Employers (2011-2012)

Example - Weekly paid employee

This Sick Pay Guide is reference only. For the most up-to-date advice see the Statutory Sick Pay Guide for Employers (2012-2013)

Operating the SSP Scheme

Recovering SSP

Recovery of SSP paid under the Percentage Threshold Scheme (PTS)

You may be able to recover some, or all, of the SSP you have paid. The PTS is designed to help employers who have a high proportion of their workforce sick at any one time so it is not restricted to small businesses.

Unless you qualify under the PTS, you are not entitled to recover any SSP.

In order to qualify for recovery under PTS, you must pay SSP payments:

  • in the tax month in which your employee notified you that they were sick
  • in the following tax month, if you are unable to pay the SSP in the tax month in which your employee notified you that they were sick
  • within the time limits laid down following a decision by an authorised officer of HMRC or First Tier Tribunal.

You can recover some of the SSP paid to your employees if the total amount of SSP paid in a tax month is greater than a set percentage of your gross Class 1 NICs (employer’s and employee’s) liability for that tax month. The amount you can recover is the SSP you have paid over and above the set percentage threshold of your NICs liability. The percentage threshold is currently set at 13%. To find out if you qualify for recovery of any SSP paid see the paragraph headed ‘Working out how much you can get back’ on page 18.

Employers with more than one PAYE scheme

If you have more than one PAYE scheme, for the same business, you must add together the NICs liability and the SSP payments for all related schemes for the same business before calculating whether you are entitled to reimbursement for that month under PTS. For SSP purposes it is your total NICs liability for that business, and not the amount paid under a particular PAYE scheme which determines whether or not you are entitled to recover SSP.

Where does the money come from?

If you are entitled to recover SSP under the PTS, you can recover SSP by using the money you have to pay over to HMRC for:

  • PAYE tax
  • Class 1 NICs
  • Student Loan deductions
  • Construction Industry Scheme deductions, and
  • the employer’s share of Class 1 NICs, which you are due to pay over to HMRC.

You may also need to use this money to pay other statutory payments, so you may not have enough money to get back all you are due in the tax month.

If not, you can use the money due next tax month to get back any balance owing.

Get help with statutory payments funding

If you are entitled to make a recovery under the PTS and you need to get the SSP you have paid to your employees back quickly, or, in exceptional circumstances, you do not have the funds to pay SSP to your employees which you would have been able to recover, you can apply to your Accounts Office for payment. You can do this where, for example, the amount of money you need to pay out exceeds the amount you will have available for the same tax month or quarter.

You can ask your HMRC Accounts Office to pay you the balance of the amount you are entitled to.

You can now apply online at www.businesslink.gov.uk/statutorypaymentsfunding select the option to recover SSP.

Applying for advance funding

The way that you apply for advance funding depends on whether the statutory payment is relevant to the current tax year or a previous tax year.

Statutory payment relevant to the current tax year

You can apply online at www.businesslink.gov.uk/statutorypaymentsfunding

You should tell them the information set out in the quick check box on page 18 and ask for advance funding.

Statutory payment relevant to both the current tax year and new tax year

If the SSP applies to a period which begins in this tax year and runs into the next one, you can still make one application either online, by post or fax. However, the SSP rate may change from one tax year to another and HMRC will adjust your application where applicable. For SSP, you need to submit a separate request form for each tax year. Applications covering two tax years will be funded in two installments. Payment relating to the current tax year should be processed within six days and the balance will follow in Month 1 of the new tax year.

Statutory payment relevant to a previous tax year

If the SSP is relevant to a previous tax year you cannot apply online, you must write to your HMRC Accounts Office.

If you haven’t yet paid the SSP to your employee you should tell them the information set out in the quick check box on page 18 and ask for advance funding. You should record the payments of SSP as normal, see ‘Recording payments of SSP’ on page 19. If you have already paid your employee, you cannot recover the SSP from your Accounts office. You should see information on page 18 ‘Recovery of SSP paid in a previous tax year’.

Working out how much you can get back

Whether or not you pay your tax and NICs monthly or quarterly, you must work out any recovery separately for each tax month.

You need to bear in mind that the period for calculating the recovery of SSP runs from the 6th of the month to the 5th of the next month which means that the monthly NICs and SSP totals recorded on the P11 and P32 may not be the same as the monthly totals needed for calculating the recovery of SSP under the PTS.

In order to ensure you recover correctly, you can use the SSP calculator on the HMRC website at www.hmrc.gov.uk/calcs/ssp.htm

Quick check box

To work out if you can get back any of the SSP you have paid you need to:

  1. Add together the SSP you have paid to all your employees in all your PAYE schemes in the tax month.
  2. Add together your gross Class 1 NICs liability in all your PAYE schemes for the same tax month and calculate 13% of this sum. Round down any fractions of a penny at the end of this calculation.
  3. If the amount at 1 is more than the amount at 2, you can recover the difference.

Deduct the amount you can recover from money due to HMRC for that tax month. If the amount you can recover is more than your monthly or quarterly payment due, carry the balance over to when your next payment is due and recover it then.

For example

Total Class 1 NICs due for tax month
£75.00
13% of that is
£9.75

Total SSP paid in tax month

£160.00
Amount you are claiming
£150.25

No PAYE payment to make

If, after deducting your statutory payment(s) from your current or next PAYE payment to HMRC you do not have a payment to make to HMRC, you must advise HMRC. If you do not, you may receive reminders or phone calls.

There are several ways to advise HMRC that you do not have a payment to make.

  1. Complete an online form (see www.hmrc.gov.uk/payinghmrc/paye-nil.htm for details).
  2. Send HMRC a signed payslip for the correct month or quarter marked ‘NIL due’.
  3. Ring HMRC on 0845 366 7816 – you will need to provide your Accounts Office reference number and the details of the month or quarter where no payment is due.

If you believe no payments will be due for several months please contact HMRC on 0845 366 7816.

Incorrect payment of SSP

If you make an incorrect payment in the current year, you must:

  • put it right
  • correct your records, payments and deductions from money due to your Accounts Office.

If you have issued form SSP1, contact the Jobcentre Plus Local Benefit Delivery Service or, in Northern Ireland, the Jobs and Benefits Office, as it may affect your employee’s right to claim Social Security benefit.

Remember an incorrect payment in one period of sickness may affect a later one.

If you find you have made a mistake in an earlier tax year, you must contact the Employer Helpline on 08457 143 143. They will tell you what to do to correct it.

See CWG2 (2011) Employer Further Guide to PAYE and NICs for information on how to correct errors in recording NICs.

Any incorrect payment of SSP may be recovered from your employee and you should treat this as you would an underpayment/overpayment of wages or salary.

It should be recorded as wages or salary not SSP.

Recovery of SSP paid in a previous tax year

If you need to recover SSP that you have paid in a previous tax year, you cannot claim this from your Accounts Office.

You should complete form SP32 to get the money back. You can print these forms from the HMRC website, go to www.hmrc.gov.uk/paye/forms-publications.htm

They can also be obtained from the Employer Orderline on 08457 646 646.

Send the completed form SP32 to:

HM Revenue & Customs
National Insurance Contributions & Employer Office
Refunds Group Contributor Group
Room BP1001
Benton Park View
Newcastle Upon Tyne
NE98 1ZZ.

Statutory Sick Pay Guide © Crown Copyright 2011

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