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Employers may recover most or all of their payments of SMP, SPP and SAP.
Is it possible to recover any payments of Statutory Sick Pay (SSP)?
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Yes. The Percentage Threshold Scheme (PTS) is intended to help employers when there is an abnormally high proportion of their workforce sick at any one time. However, the facility is not limited to small employers.
Eligibility is determined in each tax month by comparing the total amount of SSP actually paid in that period with the total employer and employee Class 1 NICs liability for that period. If the amount of SSP exceeds 13% of the NICs, the difference between the two may be reclaimed from the total NICs paid to the Accounts Office.
The test must be performed
- across all PAYE schemes; eligibility is not considered for each PAYE scheme but for the employer as a whole
- for each tax month, even if payments are made to the Collector quarterly; eligibility in one tax month does not mean that SSP can be reclaimed in another tax month.
The PTS is more likely to help small employers but larger employers with many part-time employees earning below or just above the National Insurance lower earnings limit (£;84 a week during 2006/07) could also benefit. Accountants should look out for the situation whenever SSP is paid to employees of their clients. Payroll bureaux and payroll departments caring for the payrolls for a number of companies should also check each pay period to see if the threshold has been exceeded for each employer.
At the end of the tax year, the employer must report,
- on each of the P14 Summaries for the employees in respect of whose SSP a reclaim was made, the amount of SSP that was paid to each of them and against which a reclaim was made
- on the P35 Employer Annual Return, the total amount claimed under PTS.
Example: A retail employer has two PAYE schemes, one for 40 shop floor staff (most of whom work part-time), the other for 4 managers. The total employer and employee NICs for the managers is £;1385.29 for the month, and for the shop staff it is £;1473.10. The total NICs for both PAYE schemes is £;2858.39, 13% of which is £;371.59.
Due to a flu epidemic affecting 20 of the shop staff, the employer pays out £;2101.50 in SSP during the month. The amount by which the SSP exceeds 13% of the NICs is £;1101.51, all of which can be recovered under PTS from the NICs paid to the Accounts Office for the month.
At the end of the tax year, the employer reports the amount of SSP paid to each of the 20 employees in the month on their P14s. The total amount of SSP reclaimed is entered in the reconciliation section of the P35 for the shop floor PAYE scheme.
...back to 13 July 2006
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