Statutory Paternity Pay: business changes that affect payment

What to do if an employer ceases, becomes insolvent, takes over an existing business or makes employees redundant when paying paternity pay.

You take over a business

If the Transfer of Undertakings (Protection of Employment) Regulations (TUPE Regulations) 2006 apply, then continuity of employment isn’t broken. These regulations apply when you take over a business, part of a business or a service provision together with the contracts of employment of the employees being transferred. The ‘employee liability information’ which the transferor or employer must provide gives the identities of those employees being transferred with the business.

If you aren’t sure if the TUPE Regulations apply contact Acas, or in Northern Ireland contact the LRA.

If the TUPE regulations don’t apply, continuity of employment may still not be broken when:

  • a teacher in a school maintained by a local education authority moves to another school maintained by the same authority, including maintained schools where the governors of the school, rather than the local education authority, are the teacher’s employer
  • 1 corporate body takes over from another as the employer by or under an Act of Parliament
  • the employer dies and their personal representative or trustees keep the employee on
  • there is a change in the partners, personal representatives or trustees
  • the employee moves from 1 employer to another and at the time of the move the 2 employers are associated

If continuity of employment isn’t broken, your employee can get Statutory Paternity Pay (SPP) as long as they work for you and the previous employer during the 26 weeks up to and including the Qualifying Week (QW) or Matching Week (MW).

If continuity of employment is broken and you take on a business:

  • after the birth of the baby, or after the child is placed, the previous employer must pay SPP to your employee
  • before the birth of the baby, or before the child is placed, your employee can’t get SPP

You cease to trade

If you cease to trade you remain liable to pay any outstanding SPP until either:

  • your employee has received their full entitlement
  • their entitlement ends for some other reason

You become insolvent

If you become insolvent during the SPP period HMRC will pay your employee’s SPP from the date of the insolvency.

You should advise your employee to contact the Statutory Payment Disputes Team on Telephone: 03000 560630.

You, the administrator, liquidator or other similar must tell HMRC. Your employees are then paid as soon as possible.

Your employee is made redundant

If you make your employee redundant you’re still liable to continue paying SPP providing all the qualifying conditions have been met.

Published 18 March 2014
Last updated 6 April 2016 + show all updates
  1. Rates, allowances and duties have been updated for the tax year 2016 to 2017.
  2. First published.