The rules on SMP are subject to change every year and this article sets out only the general principles. The timing of notifications and claims is critical. For a precise overview of the current rules and rates, please refer to the HMRC Guide.
Generally, in order to qualify for SMP an employee must have been with the employer for at least 26 weeks and have been paid a minimum level of salary during that time – that’s usually at the threshold for tax or NI, so it’s not particularly high.
The claim for SMP can only be prepared after a form MAT B1 is received, and the GP is not permitted to issue that until week 20 of a pregnancy.
An SMP claim to HMRC must be submitted no later than 6 weeks before the expected due date.
Do not wait for week 20, notify us as soon as you are aware of a pregnancy. There are planning opportunities that can only be implemented in the period spanning week 4 to week 16 of a pregnancy. Talk to us about this at the earliest opportunity.
Once an employer has a copy of the form MAT B1, and is satisfied that the conditions have been met, SMP can be paid. The full amounts of SMP and a degree of compensation can be recovered from the Government. Normally this is done by restricting the monthly PAYE remittance of all income tax and NI arising from the other employees. Where there are no other employees, then this recovery has to be made by a funding application to HMRC.
If you are a small employer and need the funding up front, we can complete the relevant claim for you, for a small fee. That’s normally £350 plus VAT. A separate fee may also be charged if week 4/16 planning can be implemented. The SMP compensation paid to an employer is usually enough to cover the professional fees charged by Proactive, and sometimes it’s much more.