Are Childcare Vouchers Deductable By Employers From Smps?

HMRC has removed the requirement for employers to provide childcare vouchers on behalf of employees on Statutory Maternity Pay (SMP) and only receiving no pay or only getting a salary sacrifice. Employers cannot deduct the cost of childcare vouchers from SMP but must still supply them.

However, ceasing to pay the agreed amount of salary sacrifice into childcare voucher schemes while employees are on maternity leave can risk employers. If employers continue to provide childcare vouchers during maternity leave, there is nothing in the claim for reimbursement from HMRC.

The employee is still entitled to childcare vouchers during her maternity leave without sacrificing any of her SMP. HMRC is clear that where SMP only operates based on salary sacrifice, this could affect the calculation of the employee’s SMP, causing the employee to receive a deduction.

However, a recent employment case showed that it was not unlawful for the employer to discontinue provision of the vouchers while the employee was on maternity leave. If the employee receives contractual maternity pay that is better than the vouchers, it was not unlawful for the employer to discontinue provision of the vouchers.

Finally, employers who provide childcare vouchers on top of salary or other non-cash benefits must continue to provide these while an employee is on maternity leave. The question of whether the employee remains entitled to childcare vouchers during Maternity Leave has been a vexed one, as failing to do so will result in direct and indirect discrimination.

Is all SMP recoverable?

In the case of small employers, the amount recoverable is 100 plus 3 in Small Employers’ Relief. Conversely, those with an employment liability of 92 can recover 92. The amount reclaimed serves to reduce both the liability for the specified pay period and the liability of the relevant HMRC entity for that same period.

Can deductions be made from SMP?

SMP (Summary Medical Leave) is subject to tax and National Insurance, and employers can make authorized deductions like pension contributions and trade union membership. They can also make deductions for overpayment of wages. SMP can be paid in cash but cannot be replaced by other benefits like board and lodging or goods and services. SMP can be offset against any contractual remuneration owed, such as keeping in touch day or occupational maternity pay, but cannot be offset against other benefits during maternity leave.

Can you go on maternity leave twice in a row?

In the event of pregnancy during the period of maternity leave, the employee is permitted to resume work without the necessity of resuming duties. Nevertheless, it is necessary to ascertain whether it is possible to receive maternity pay once more, and to exercise the same rights as were enjoyed during the initial pregnancy. The regulations pertaining to the provision of notice and the commencement of leave remain unchanged, with employers being informed of the intention to take leave 15 weeks prior to the expected date of delivery.

Can overpayments be deducted from SMP?

The Act permits employers to deduct wages in instances of bona fide overpayment, including those pertaining to Statutory Maternity Pay (SMP) disbursements. In the event that an agreement cannot be reached, employers are permitted to make future deductions in order to recover the amount that was overpaid, even in instances where an agreement cannot be reached with the employee.

Does SMP eventually disappear?

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What happens if I fall pregnant while on maternity leave?

Employees who become pregnant during maternity leave are entitled to an additional 52 weeks of leave. However, they cannot start their next leave until the 11th week before their baby is due. If their first leave ends before this, they must return to work until the 11th week, consider taking another type of leave (such as holiday leave), or employ someone else to do the work (‘maternity cover’) while the employee is on maternity leave. The employer must decide if this is possible and provide the correct notice.

Can you get a refund for overpayment?

An overpayment credit is a tax payment that exceeds the owed amount, and the credit is automatically refunded. However, the credit can be applied as an advance payment towards next year’s taxes instead of being sent as a refund. The refund should be received within 4 to 6 weeks if no other taxes or debts are owed. If the refund is not received within this timeframe, the customer can contact the company.

How do you resolve overpayments?

Overpayments in accounting are common and can occur due to various reasons, such as miscalculation or accidental payment. To handle these overpayments, businesses must communicate with customers and provide options for refunding or establishing a credit. Account credits caused by customer overpayment are recorded as liabilities or contra-assets on the balance sheet until applied against an invoice. Accrual-basis businesses are subject to the same common sense and ethics, but the accounting rules and relevant bookkeeping adjustments are more complex.

In a real-life overpayment incident, the owner followed one of the correct procedures without the benefit of accounting knowledge, demonstrating the importance of proper record-keeping in accounting systems for accurate financial statements. Accrual-basis businesses must follow the same common sense and ethics, but with more complex accounting rules and bookkeeping adjustments.

What is classed as maternity discrimination?

Pregnancy and maternity discrimination refers to the unfair treatment of individuals due to pregnancy or being pregnant. It can also occur within six months of giving birth or breastfeeding. To take legal action against such discrimination, individuals must check if the Equality Act 2010 covers the situation. This law prevents businesses and service providers from discriminating against individuals, including those who are pregnant or were pregnant.

Does SMP get backdated?

An employee’s pay rise between the start of their maternity pay calculation period and the end of their leave will affect their statutory maternity pay calculation. The employer must recalculate the employee’s weekly earnings and backdate the increase to the start of the maternity pay period. A pay rise may also result in the employee becoming retrospectively entitled to statutory maternity pay if their earnings were initially too low.

Can you take back overpayment?

Employers can reclaim overpaid wages even if an employee has left the company. However, if the employee has already left, it can be more challenging to recover overpayments. If the final salary payment has not been made, an informal request for repayment can be made. If the employee refuses, court action can be considered, but success depends on the employee’s financial circumstances and legal fees.

If an overpayment is discovered after the employee has left and refuses voluntary repayment, the employer should consider legal options, such as gathering information about the employee’s current means and employment status to determine if repayment is possible.