PAYE21225 - Employer records: maintain employer record: SAP and SPP
This subject is presented as follows
Background
In April 2003 there are a number of changes that will affect working parents. Two new schemes are being introduced
- Statutory Adoption Pay (SAP)
And
- Statutory Paternity Pay (SPP)
For those parents satisfying certain conditions payments will be made via their salary
- Conditions for SAP (Word 26KB)
Or
- Conditions for SPP (Word 27KB)
The employer can then claim back
- 92% of any payment made
Or
- 100% (plus compensation) if they qualify for Small Employers Relief (SER) (Word 26KB)
For 2003/4
- The compensation rate for payments made will be 4.5%
And
- The SER threshold will remain at £40,000
The weekly rate of SAP / SPP is the lesser of
- The standard rate (£100 for 2003/04)
Or
- The earning-related rate (90% of employee's average weekly earnings)
This payment is liable to deductions of
- Income Tax
- National Insurance Contributions
And
- Deductions that would be taken from the employee's normal wages, such as trade union subscriptions
SAP / SPP is not liable to deductions for
- Attachment of earnings orders (arrestment of earnings orders in Scotland)
Or
- Child Support Agency deductions from earnings orders
Entitlement to SAP / SPP does not affect the employee's entitlement to contractual paternity pay or other remuneration. An employer may offset liabilities of SAP / SPP and other earnings.
HMRC is responsible for ensuring that employers correctly administer the scheme and for providing employers with the correct amount of funding.
Funding
Employers are expected to use the PAYE tax, NICs, Student Loan deductions and Construction Industry Scheme deductions to make the payments. If they do not have enough they will also be able to apply for funding to make these payments retrospectively or in advance. To make a claim the employer must contact their relevant Banking Operations office
If the employer needs help they can call the Employer Helpline
- Tel 0845 7143143
Notice
Notice does not have to be in writing unless requested by the employer.
It will normally be given in person, but an employer must accept notice given on behalf of the employee.
If notice is given by post it is treated as given on the day on which it is posted.
Employer responsibilities
The employer is responsible for
- Administering the scheme and keeping records of
- The evidence of entitlement to SAP / SPP
- The weeks when SAP / SPP was paid
- The amounts paid
- The date the Adoption Pay Period (APP) / Paternity Pay Period (PPP) began
- Any weeks in the APP / PPP where SAP / SPP was not paid, with the reason(s)
- Paying their employees what they are entitled to
- There are penalties for failing to pay SAP / SPP
- If the employer is insolvent or refuses to pay the SAP / SPP the liability to pay will transfer to HMRC
- Paying SAP / SPP to a former employee except in weeks where employed by a new employer
An employer must not
- Make any agreement to exclude or limit or change the employee's statutory entitlement
- Require an employee or former employee to
- Repay the SAP / SPP
- Contribute to the costs of administering the scheme
The employer will record the amount of SAP / SPP paid on the form P11 or equivalent
- Form SAP2 record sheet is also available to employers to record payments of SAP if required
Four new Help books are available to order from the Orderline to assist employers
- Help Book E15 'Pay and time off work for parents'
- Help Book E15 Supplement 'Pay and time off work for parents special cases'
- Help Book E16 'Pay and time off work for adoptive parents'
And
- Help Book E16 Supplement 'Pay and time off work for adoptive parents special cases'
This guidance is also available on the Internet and Employer CD-ROM.
Employee responsibilities
The employee must tell their employer the date from which they wish to be paid, and provide
For SAP
- Evidence for SAP (Word 24KB) from the adoption agency including the date on which the child is expected to be placed with them
For SPP
- The expected date of childbirth
- Whether they intend to take 1 or 2 weeks off work
- Evidence for SPP (Word 24KB) which may (not necessarily) be on SC3
For both
- They must inform a former employer who is still paying SAP / SPP to them any dates on which they work for a new employer
The employee must give notice at least 28 days before they expect their entitlement to SAP / SPP to begin, or, if this is not reasonably practicable, as soon as possible.
If the employee is late in giving notice, the employer must decide if the delay is reasonable based on the employee's circumstances.
If they think the delay was unreasonable, the employer can refuse to pay SAP / SPP at all but must tell the employee their reason(s) and may be required to provide a written statement on request. The employee may then request HMRC to make a decision on their entitlement.
End of year employer action
The employer will at the tax year end
- Add up the amounts of SAP / SPP paid shown on form P11 and record these on forms P14 and P60 or equivalent
- Calculate the total SAP / SPP recovery and NI compensation and record these on form P35 or equivalent
Payment
SAP / SPP and adoption / paternity leave must
- Be taken in a single period
- Not be split
- Not be taken as odd days
The maximum amount of time SAP can be paid for is 26 weeks (any period of 7 days)
SPP can be paid for one and two weeks.
SAP / SPP is not payable by the employer for any week
- In which the employee works
- In which the employee receives Statutory Sick Pay
- After the week that the employee dies
- After the employee is taken into custody
Processing returns
The amounts entered on the annual return for the following as with all other monetary entries on a return, will be entered onto the Employer Business Service (EBS) by using Function CAPTURE EOY RETURN DETAILS
- SAP / SPP paid
- SAP / SPP recovered
And
- NI compensation
All monetary fields using this function require entries to be input twice.
