PAYE72055 - PAYE operation: payments for PAYE purposes: payments to employees in accidents
If an employee is absent from work following an accident, an employer may pay the employee
- Sick pay
Or
- An advance of pay
These may be paid on the undertaking that the employee, when
awarded compensation for loss of earnings (arising from a damages
claim), will refund a suitable amount of that compensation to the
employer.
PAYE should operate in the normal way on any sick pay and
advances that are made.
If a refund of pay is made by the employee to the employer,
a repayment of tax may be due to
- The employer
- The employee
- Both
Depending on the circumstances, the employer will receive either
- All or part of the Sick pay
- All or part of the net advance of pay
- All or part of the gross advance of pay
If Sick pay has been refunded to the employer by the employee
you should follow the Action Guide ‘Accidents: Sick
Pay’ at
PAYE72059.
If the
net advance has been refunded to the employer you
should follow the Action Guide ‘Accidents: Net Advance
Refunded’ at
PAYE72058.
If the
gross advance has been refunded to the employer
you should follow the Action Guide ‘Accidents: Gross Advance
Refunded’ at
PAYE72057.
Refer any cases of doubt or difficulty to PSN PAYE
Technical, Shipley.
