Reclaim statutory maternity pay 2 October at 12:10PM edited 2 October at 12:13PM in Small Biz MoneySaving 2 replies 92 views

seatbeltnoob

Hi

Employee of mine (my wife) was on furlough @ £471 a month since the beginning of the furlough scheme (on my Ltd company). 

She wouldn't be entitled to SMP normally at that pay because it's less than £120 a week. However because it was 80% pay due to furlough, the below applies:

under the parapgrah titled Employees furloughed under the Coronavirus Job Retention Scheme (CJRS)

on https://www.gov.uk/guidance/statutory-maternity-pay-manually-calculate-your-employees-payments

It states that employees Average Weekly Earnings (AWE) should be calculated at the ususal rate not the 80% at the CJRS level.

The business was in hibernation during entire covid. So I wouldn't have been able to pay her for any work so I would have reduced her hours. So in theory I could still go by the PAYE payments for purpose of SMP calculations. Based on this statement

No changes to how you work out their AWE will be needed where:
as a result of the coronavirus crisis, during the relevant period you agreed a reduction in pay with your employee outside of the CJRS

I have informed her that if it wasn't for the CJRS she wouldn't be on the payrolll. I don't know if this is tantamount to agreeing to reduce her hours. But there is just one sentence and I'm not sure about exact guidelines on how you would go by this and I don't want a £3000 HMRC fine by going by this and finding that I did something wrong.

I learnt that the business can claim back any SMP from HMRC through the payroll. The trouble is all throughout the 2020/21 tax year, there was no employers NI due or paid. I was on LEL and she was obviously below the LEL entirely.

Can the business still reclaim for SMP payments when it made no contributions to NI?

On this page https://www.gov.uk/recover-statutory-payments

It says the business can reclaim the SMP if it's entitled to Small Employer's Relief (if you paid below £45,000 in NI). I'm interpreting this as pay some NI (below £45K), not £0.

Can someone shed some light into this.

Savvy_Sue

I'd contact the employer's helpline and ask them. I know that when I have a colleague receiving SMP I get a reduction on what I have to pay HMRC, so I don't know if you'd get money back if the SMP exceeded the NI due ...

How do you make your calculations normally? You could try putting the figures in and see what comes out the other end on your P30? Then speak to HMRC before submitting your RTI. 

seatbeltnoob

I called, yes you can reclaim statutory maternity pay from HMRC if you cannot offset it against your NI payments.