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HMRC internal manual

Statutory Payments Manual

Introduction: responsibility of HMRC

HM Revenue and Customs (HMRC) are responsible for ensuring that employers:

  • pay their employees the statutory payments (SP) to which they are entitled, and
  • recover the correct amount.

This includes:

  • educating employers about:

    • the schemes
    • their responsibilities as the liable employer
    • their employees’ rights, and
    • the amount of the SP that can be recovered
  • dealing with all SP questions and disputes, including giving opinions on liability when there is a dispute between employees and employers, and making formal decisions in accordance with Section 8 of the Social Security (Transfer of Functions etc.) Act 1999 and handling any subsequent appeals
  • making a decision on SP entitlement if requested to do so by DWP
  • arranging for advice to employers on specific technical questions and medical issues relating to the SP
  • seeking medical advice
  • ensuring that employers comply with the provisions of the payment and recovery schemes
  • payment of SP where the employer defaults or is insolvent
  • enforcing compliance in accordance with legislation and charging penalties as appropriate.

The right of appeal against an HMRC Section 8 decision on SP is with First-tier Tribunal. For more information see ARTG1030

Defaulting Employer

If an employer fails or refuses to pay an employee their SP entitlement they are in default. Under these circumstances, liability to pay the SP transfers to HMRC. See SPM181100.

Defaulting employers may be given penalties. Penalties may also be imposed for other failures such as failure to keep or produce records for inspection. For more see SPM230000.

Matters concerning policy on SP are the responsibility of The Department for Work and Pensions (DWP) for SSP and SMP and The Department for Business, Energy & Industrial Strategy (BEIS) for SPP, SAP and ShPP. The overall administration of all SP lies with HMRC.