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HMRC internal manual

Statutory Payments Manual

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HM Revenue & Customs
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Paying and Recovering - SMP/SAP/SPP/ASPP/ShPP: Small Employers’ Relief (SER) definition of small employer

Employers can qualify for SER for SMP/SAP/SPP/ASPP/ShPP.

A small employer is one who’s total gross Class 1 NICs, including primary (employee) and secondary (employer) liability, is at or below a set annual threshold, in the qualifying tax year.

For this calculation, gross Class 1 NICs exclude:

  • Class 1A,
  • Class 1B, and
  • any NICs rebate

The rules for determining who is a small employer for SER are laid down in:

  • SMP (Compensation of Employers) and Miscellaneous Amendment Regulations 1994 (SI 1994/1882)
  • SMP (Compensation of Employers) and Miscellaneous Amendment Regulations (Northern Ireland) 1987 (SR1987/30)
  • Section 7(3) Employment Act 2002.
  • Regulation 3 of the Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations 2002 SI2002/2820.
  • Regulation 3 of the Additional Statutory Paternity Pay (Birth, Adoption and Adoptions from Overseas) (Administration) Regulations 2010 SI2010/154.
  • Article 8 of the Employment Order (Northern Ireland) 2002.
  • Regulations 3 to 8 of the Statutory Paternity Pay and Statutory Adoption Pay (Administration) Regulations (Northern Ireland) 2002 SR2002 No 379

Qualifying tax year

The qualifying tax year for SMP, SAP, ASPP and SPP is defined as the last complete tax year before the employee’s Qualifying Week (QW), Matching Week (MW) or Official Notification Week (ONW).

It is the employer’s responsibility to check the QW/MW/ONW of each employee’s SP to see if they can be classed as a small employer, for each payment.