Sick Pay Guide for Employers

Recovering Statutory Sick Pay

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 only to small businesses.

Unless you qualify under the PTS, you are not entitled to recover any of the SSP you pay to your employees.

Where does the money come from?

Use the money you have to pay over to HMRC for:

• PAYE tax
• Class 1 National Insurance contributions
• 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.

Funding from your Accounts Office

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 now apply online at

http://www.hmrc.gov.uk/employers/statpaymentsrecovery.htm

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.

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 NIC 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, you should tell them the information set out below and ask for funding.

Total Class 1 NICs due for tax month £0.00
13% of that is £0.00
Total SSP paid in tax month £136.40
Amount you are claiming £136.40

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 your nearest HMRC office, they will tell you what to do to correct it.

See CWG2 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, and should be recorded as wages or salary not SSP.

Recovery of SSP paid in a previous tax year

If you need to recover SSP for payments made 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 Employer CD-ROM or go to www.hmrc.gov.uk/employers

They can be obtained from your nearest HM Revenue & Customs office or from the Employer Orderline on 08457 646 646.

Send the completed form SP32 to:

HM Revenue & Customs
National Insurance Contributions Office
Employer Teams 1 and 2
Refunds Group Contributor Group
Room BP1001
Benton Park View
Newcastle Upon Tyne
NE98 1ZZ.