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HMRC internal manual

Statutory Payments Manual

From
HM Revenue & Customs
Updated
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Paying and Recovering - SMP/SAP/SPP/ShPP: holding company

If the employee is employed by a holding company any of the following examples may apply:

Example 1

A holding company has several subsidiaries.

  • Each has its own employees
  • Is liable for its own employers’ Class 1 NICs for its employees
  • Has its own PAYE scheme.

In this case, each individual company would be the employer for SP purposes and would need to consider whether they qualify for reimbursement.

Example 2

A holding company has several subsidiaries but the holding company engages the employees and allocates them to the subsidiaries.

Although the employees are paid locally and the initial accounting is done locally, the holding company provides the resources for payment of, for example, wages.

No matter how many PAYE schemes are set up it is the holding company, which is ultimately liable for the secondary Class 1NICs and the payment of SP.

In this case, the holding company would be the employer and would need to decide if it qualifies for reimbursement.

Example 3

A large retail chain has a number of branches throughout the country.

Although each branch hires and fires its own employees, wages are paid from the central head office and returns are made for a number of PAYE schemes.

In this case the company, not the individual branches, would be the employer for SP purposes and would need to decide if it qualifies for reimbursement.