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HMRC internal manual

Statutory Payments Manual

Paying and Recovering - SMP/SAP/SPP/ShPP: employer fails to pay SP following advance funding

Payment by HMRC can only be made to an employee following default after a formal decision has been issued or for a post insolvency period. Action taken would depend on the employer’s response to the issue of a formal decision and expiry of the 30 day appeal period. If there is an appeal within the 30 day appeal period, see the Decisions and Appeals for National Insurance and Statutory Payments (DANSP) manual.

Where an employer has obtained an advance payment from HMRC to pay an employee and the employer retains the payment without paying the employee, the Statutory Payments Disputes staff should:

  • prepare a report with the full facts of the case and forward to the compliance team for their consideration of recovery
  • outline details of the case and pass it to the decision maker, together with all available evidence, for a formal decision to be issued

For details of possible penalty action, see SPM181300