Client has informed me that one of his employees is due to start SMP leave at the beginning of April. [There are only two employees, The Director and one staff member]
Employee qualifies based on length of service, pay level etc for SMP.
My question is surrounding the SMP funding and compensation, from reading up, client can claim 100% of the SMP and also 3% compensation.
But when can he get the SMP money refunded.
Am I right in thinking that the payroll has to be processed first, then a request submitted to HMRC for the refund/compensation, then HMRC will post out the cheque a few weeks later?
What I mean is that the employer has to pay the employee first then claim back from HMRC, they cant get funding upfront then pay employee?
It is possible to get the SMP Funding upfront from HMRC as one of my clients got their accountant to oraganise this recently.
I have never applied for the Fudning up front myself - but it is possible. I am sure one of the smart bods on here will have done this beforea dn can advise better than me.
Thanks Ben, yep hopfully someone else on here can confirm.
I was under the impression that the refund would be made every month, i.e. I would submit a new claim at the end of each month based on the number of week in that month but the more I'm reading i get the impression that I can apply for the full 26 weeks straight away, can that be correct?
Normally the SMP is deducted from the amount of total PAYE and NI that is due for that month. If however the SMP is more than the total PAYE and NI payments you make in that month then you can apply for advance funding.
If you make a note of the total SMP to be paid for the month and the total of all PAYE, NI (including that on the SMP), Student loan deductions and CIS due and the total of tax is less than the SMP to be paid then you can write to HMRC to apply for advance funding. Although how you can know the total amount of PAYE and NI etc in advance I don't know! I have dealt with SMP, but have never had to apply for advance funding.
If you need help you can ring the Employer's Helpline on 08457 143 143
With this particular client, the Director is only paid £500 p/m and the one staff member [the one thats going on SMP] is paid roughly the same, so currently the PAYE/NI Liability is only ever a few pounds each month, so unfortantly nothing to deduct from.
Would you believe tried the employers helpline twice all ready today, first time i was holding forever, had another call come through so had to hang up myself and then 2nd time, after holding again for a while, got through to someone explained the situation and they hung up on me..... maybe third time lucky ......
In the situation you describe, you can apply for funding for the whole of the SMP period in advance, but the HMRC will probably pay you in 2 lots, up to 05/04/2012 and then for the period after 05/04/2012, once the rates for the new yax year have been established.
You can apply online, it's very straightforward and the cheque comes through quite quickly.
Know this is an old post, but Bucks Bodger above is correct, they split the payments between the tax years. Have just applied for a client online and the first payment up to 5th April came straight into their bank within a week! Very surprising for HMRC to be that quick...
