How to Reclaim Statutory Pay from HMRC?

As a rule, employers will be able to claim back up to 92% of payments made for employees’:

• Statutory Maternity Pay (SMP)
• Statutory Paternity Pay
• Statutory Adoption Pay
• Statutory Shared Parental Pay (ShPP)

To qualify, you must have paid no more than £45,000 in Class 1 National Insurance in the last complete tax year (ignoring any Employment Allowance reductions), and prior to the:

• ‘Qualifying week’ (the 15th week before the week of the due date (Sunday to Saturday)).
• ‘Matching week’ (the week they matched your employee with a child by the adoption agency (Sunday to Saturday)).
• Date on the official notification stating the proof of adoption (for employees adopting a child from another country).

You can use your payroll software to calculate how to reclaim statutory payments. Hence, you should include the payment in your Employer Payment Summary (EPS) report made to HM Revenue and Customs (HMRC).

But, what if you are unable to set off the payments against your liabilities for the current tax year? In this case, you can ask for a repayment by writing to the PAYE Employer Office, instead.

National Insurance Contributions and Employers Office
HM Revenue and Customs
BX9 1BX

Note: Wait until the start of the next tax year before writing to them. Employers who did not operate PAYE in real time (RTI) should use form SP32 to recover statutory payments for a previous year.

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Do You Need Financial Help with Statutory Pay?

What happens if you cannot afford to make statutory payments to HM Revenue and Customs? Employers can use the online service (or send an email) to apply for advance of statutory parental, paternal, adoption and maternity pay.

The earliest that you can apply online to get paid in advance by HMRC is four (4) weeks before you want to get the first payment. Applying earlier may result in HMRC returning your application.

Note: Including incorrect information in an application can result in a financial penalty of £3,000 per employee (for each tax year).

Paying Back Advance Statutory Payments

You need to send an Employer Payment Summary (EPS) for each of the pay periods that you have reclaimed statutory payments. The same process applies even if HMRC sent you an advance payment to cover the statutory payments for your employees.

In some cases, the statutory payments you reclaim may be more than your PAYE deductions (for that particular month). If so, HMRC would use the balance to reduce the amount that you owe on your advance payment.

You may still owe some money to HMRC at the end of the pay period that the advance covers. If so, you should make the payment as normal before the standard payment date for that particular month.

Note: Another section explains more about the process of reporting FPS and EPS to HMRC as part of the regular tasks of running payroll.

Advance Funding for a Previous Tax Year

You should write to HMRC to apply for advance funding for any statutory payments that relate to previous tax years (e.g. one where you have not yet been paid).

HM Revenue and Customs
Corporate Treasury
BX9 1BG

The application should include:

HMRC account information, such as your:

• Accounts Office reference (found on the cover of your P30BC payment booklet or P30B letter titled ‘Paying PAYE electronically’).
• PAYE reference (also found on your P30BC payment booklet, or letter titled ‘New employer registration and reference numbers’).

Details about the actual application, such as the:

• Name and National Insurance number of the employee that receives statutory payments.
• Date that the employee started employment with you (or the actual date they started employment in business transfers, takeovers and TUPE).
• Dates relating to the claim.
• Details of any reduction to monthly or quarterly payments (if applicable).
• Total amount that you have entitlement to reclaim.
• Amount of advance funding that the claim relates to.

Specific information relating to the statutory payment, such as the:

• Expected date of birth or adoption (for maternity and adoption pay).
• Actual date of birth or adoption (for paternity pay).
• Details on whether the adoption is in the United Kingdom or overseas (for adoption pay).
• Date that the mother or joint adopter returns to work and stops receiving Statutory Maternity Pay, Maternity Allowance or Statutory Adoption Pay (for Additional Statutory Paternity Pay).

Remember to include:

• The date that your business started (or the start date of the business for TUPE cases).
• Your contact details (e.g. name and telephone number).
• Bank account details for receiving payments from HMRC (e.g. account name, number (or building society roll number), sort code).

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What if You Became Insolvent?

HMRC still pays Statutory Maternity, Paternity or Adoption Pay in cases of insolvency. But, your employees must have been getting these payments at the time that you became insolvent.

The same also applies for pregnant employees once they have passed the qualifying week – even though they may not have started receiving SMP.

Also, in cases of insolvency, someone (either you or the administrator or liquidator) must contact the National Insolvency Unit to notify them that you are insolvent.

National Insolvency Unit Helpline
Telephone: 0300 0540 808
Monday to Thursday: 8:30am to 5pm
Friday: 8:30am to 4pm

The guide on PAYE for employers contains further information about your responsibilities. For example, you must tell your employee(s) to contact the Statutory Payment Disputes Team if you become insolvent.

Statutory Payment Disputes Team
Telephone: 0300 0560 630
Information about call charges.

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