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.
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)
