New tax year changes: the end of the Statutory Sick Pay rebate

Whilst many of the changes announced by the Chancellor, George Osborne, during the 2014 Budget took the headlines at the turn of the tax year on April 5th and 6th, another comparatively minor change may well have a particular effect on smaller employers in the forthcoming year.

As of 6th April, the government has abolished the Statutory Sick Pay (SSP) rebate scheme, which enabled employers to claim SSP paid out to sick employees by way of a reduction in their PAYE payments. The scheme was administered on a percentage basis, with larger employers often unable to claim any rebate, whilst smaller employers could frequently claim back 100%.

Because of this it is likely that the abolition of the rebate will hit smaller employers disproportionately, as they will now have to cover the cost of paying SSP to workers who are off sick. For one or two people businesses, this cost, added to losing an employee, could add up to a significant change in circumstances.

The change is justified by the government as being part of its plan to encourage more people to get back to work. The money saved by abolishing the scheme will go towards the Health and Work service, which will aim to do just that. Whilst more people back in work is good news for employers, the increase in costs experienced due to this change will still be an additional burden to overcome.

It is important to note that whilst the scheme has ceased to operate as at the start of the 2014/2015 tax year, employees can still claim the SSP rebate for employees who were absent during 2013/2014 until the end of the 2015/2016 tax year.

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