One of the questions we are asked by clients on a fairly regular basis is if they can claim any money back from HM Revenue & Customs (HMRC) for statutory maternity pay (SMP) and the answer is yes.
For many businesses the cost of employing someone who claims SMP can feel like a massive financial burden and administrative nightmare. Thankfully, it’s not, as depending on the size of your business you should be able to claim all, or certainly most, of this money back from HMRC.
Read below how to recover this expenditure from the government.
What you can reclaim
As an employer, you can usually reclaim 92% of employees’ SMP, Paternity, Adoption and Shared Parental Pay.
You can reclaim 103% if your business qualifies for Small Employers’ Relief. You get this if you paid £45,000 or less in Class 1 National Insurance (ignoring any reductions like Employment Allowance in the last complete tax year before:
- the ‘qualifying week’ – the 15th week (Sunday to Saturday) before the week of the due date
- the ‘matching week’ – the week (Sunday to Saturday) your employee was told they’d been matched with a child by the adoption agency
- the date on the official notification if your employee is adopting a child from another country
How to reclaim
Calculate how much you’ll get back by using your payroll software. To reclaim the payments, include them in an Employer Payment Summary (EPS) to HMRC.
You can write to the PAYE Employer Office to ask for a repayment if you can’t set off the payments against the current year’s liabilities. You can’t do this until the start of the next tax year.
National Insurance Contributions and Employers Office
HM Revenue and Customs
If you would like to discuss any aspect of the Maternity process, please do get in touch.