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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/ASPP/ShPP: paying as a lump sum

There is nothing in the law to prevent payment of SMP/SAP/SPP/ASPP in a lump sum.

However, if an employer asks about making such payment advise them that doing so could cause an overpayment of wages and lead to an underpayment of NICs.

This would occur if there is a change in the employee’s circumstances during the MPP/APP/PPP/ShPPP after the lump sum has been paid which reduces her entitlement to SMP/SAP/SPP/ASPP/ShPP, for Change in Circumstances see SPM200000.

Any overpayment must not be treated as SMP/SAP/SPP/ASPP/ShPP - it is an overpayment of wages. If an employer has overpaid an employee their only recourse is to recover it from the employee.

If the employer recovers an amount from the NI Fund based on the amount wrongly paid to the employee as SMP/SAP/SPP/ASPP/ShPP, rather than the amount that was actually payable, they will be recovering too much and this will then cause an underpayment of NICs which must be corrected.

Also, if the employer decides to pay SMP/SAP/SPP/ASPP/ShPP in a lump sum, the employer and employee could pay more in NICs than if it was paid weekly or monthly.