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HMRC internal manual

Trusts, Settlements and Estates Manual

Trusts for particular purposes: employer sick pay schemes

Employers create sick pay schemes to meet employee sick pay and/or medical expenses. The schemes are funded in one of two ways.

  1. The employer will provide the trustees with sufficient funds to meet sick/ medical expenses already incurred. Or the employer will make such payments as agents for the trustees.
  2. The employer makes sums available to the trustees periodically. These are made before payments of sick pay/ medical expenses are due.

Some schemes/ funds provide for employees to make contributions. These are treated the same as the others.