Important Changes to Statutory Sick Pay

April this year saw the implementation of a number of changes to the operation of Statutory Sick Pay (SSP), which amongst other things will prevent businesses from reclaiming part of their SSP payments, seen by tax specialists to have a potentially detrimental impact on smaller businesses.canada goose jakker

What are the changes?

1.      Removal of the Statutory Sick Pay Percentage Threshold Scheme (PTS)

Under PTS an employer who qualified for the reimbursement scheme could reclaim some of the amount paid as Statutory Sick Pay where it was more than 13% of their Class 1 NIC due in the month it was paid.  The aim of the scheme was to protect smaller businesses from the impact of higher than average sickness absences.

Example:

SSP paid = 630.00
Gross NI £3,704.29 x 13% = 481.56
SSP recoverable: (£630 – £481.56) = £148.44

Whilst the scheme is no longer in operation, employers can continue to claim any outstanding amounts in relation to the 2013 / 2014 tax year, or previous years, as long as they do so by April 2015.

If you think your business might be eligible to claim this relief whilst it is still available and need help to do so, contact our team on 0117 9474747.

2.      Creation of the Health and Wealth Service

This is an independent assessment service which aims to make expert health and work advice readily available to both employers and employees in a bid to reduce the amount of absences and get employees returning to work as quickly as possible after illness.

The service is due to be rolled out from this autumn and fully operational by April 2015 and will be funded through the savings made from the abolition of the PTS.canada goose jakker

The service will have 2 functions;

Provision of Advice – Employers, employees and GPs will have access to advice about health conditions and what support is needed.

Assessment of sick employees – After a period of absence of 4 weeks an employee can be referred by their GP or employer for an occupational health assessment which will identify what is preventing a return to work and the steps that can be taken to speed up recovery.

Further details of the scheme can be located on the Health, Work and Wellbeing initiative site on Gov.uk.

3.      Changes to the SSP record keeping requirements

The abolition of the PTS means that the associated SSP record-keeping requirements have also stopped although employers will still be required to maintain records for PAYE purposes in order to demonstrate they are meeting their SSP obligations.

What is behind these changes?

Following an independent review of sickness absence in Britain in 2011, a number of recommendations were made to make it easier for employees on sick leave to get back to work.  This change came out of that review as it was felt that the current PTS relief did not encourage employers to get their sick employees back to work.

Full details of the findings of the review and recommendations can be located here.

What will be the impact on businesses?

The removal of the PTS relief is seen by tax experts to have a particularly big impact on the finances of smaller businesses as they will have to cover the full cost of Statutory Sick Payments.

It is believed however that the new Health and Wealth scheme will help employers work with health professionals and their absent employees to get them back into the workplace much quicker than at present which will have a far greater positive impact on the business overall.

A further impact of this change that shouldn’t be forgotten is that any treatment required to aid the return to work will have to be funded by the employer, although they may be eligible on tax relief on costs of up to £500 a year per employee (subject to certain limitations).

Further information and Help

If you have any questions about these changes or how they might impact your businesses, or to get help reclaiming PTS relief whilst it remains available, contact  the team at Qtac or call on 0117 9474747.

 

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Simon Palmer

Simon Palmer is a Director at Qtac.
Simon Palmer
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