I have always assumed that if SMP or SPP is taken across two tax years, in week one of the new tax year the rate paid (if at the statutory amount) goes up.
However I have just gone through the HMRC calculator for an employee that started 2 weeks paternity leave in week 52 and it keeps the amount paid in week 1 of 15/16 at the 14/15 rate.
Is this correct?
Replies (15)
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5th April
This year, payment weeks starting Sunday 5 April are paid at the new rate.
Same principle as always, except the actual date changes with the calendar. If the calculator isn't doing this, maybe it hasn't been updated, or maybe this is outside its scope of operation.
Update
You'll need software that is aware of next year's rates. With some software that may not happen until next week.
Not quite
"Even though the pay date is in 15/16 as the week started in 14/15 the old rate should be used, never come across that before"
This year SMP weeks that start on Sunday 5th April are paid at the new rate even though 5th April is in the old year. It's slightly different each year depending on the date of the Sunday.
Known fault
Hi there
It is a known fault on HMRC website that it is not calculating using the new 15/16 rates. CIPP have been asking people to fill out the 'whats wrong with this page' option but HMRC have not acted on it yet.
@NH SMP weeks always start on a Sunday, so in this year the week doesn't start on the 4th.
Agree with Euan
@NH SMP weeks always start on a Sunday, so in this year the week doesn't start on the 4th.
Originally, this was so, but it changed a few years ago, so that mothers could start their SMP on any day of the week.
Effective dates
I thought that it was only the rate of SSP which goes up to the 2015/16 level on 5th April and that all other statutory payments only go up on 6th April, so SMP would only be paid at the 2015/16 rate from the start of the week starting on 6th April or later.
SMP weeks run from the day on which the employee started her maternity leave, so if she started on a Monday, her SMP for the week commencing Monday, 30th March, would be at the 2014/15 rate and for the week commencing Monday, 6th April, at the 2015/16 rate.
Am I (and Moneysoft) wrong?
Part weeks
It does go up at the start of the new tax year.
I always thought it went up from the first week starting after 5th April. However, I'm not going to lose much sleep about overlap weeks. The difference is only coppers - 20p a day, to be precise.
If you look at the Funding Claim Form, it does say that, if you don't know the rate for the following tax year, use the rate for the current year and HMRC will automatically correct it when the rates are announced. This implies that the rate changes for the new year.
Yes and no
I was incorrect about the Sunday week starts, but the HMRC Update for developers states that:
"2015-16 Statutory Payment standard weekly rates
Standard weekly rates of SMP, SPP, SAP, ASPP and ShPP change from £138.18 to £139.58 and this new rate applies to payment weeks that begin on or after the first Sunday in April (Sunday 5th April 2015)."
After the gov.uk reorg I can no longer find this on the HMRC site, but I'm quoting an HMRC email dated 19 Dec 2014.
Surprised
I'm surprised by that. National Insurance has been based on weeks for as long as I can remember - probably since inception - but, as far as I recall, has always used the first Sunday in the tax year, rather than April, as the date for changes in rates.
I'm not convinced that the advice which you have been given is correct.
As it happens, it affects neither of the cases I'm dealing with at the moment. If I was toey about it, I'd just give the lass her extra £1.40. Not worth the fuss.
Calculations
Where statutory payments cross two tax years, BrightPay calculates the statutory pay to apply as follows:
It takes the first day of the statutory payment week so, for example, if an employee goes on maternity leave on a Wednesday, their statutory payment week will run from a Wednesday to Tuesday. BrightPay will look and see what date each Wednesday falls on. The employee will thus have a statutory payment week commencing Wednesday 1st April – Tuesday 7th April. As the 1st April falls before the start of the 15/16 tax year and before Sunday 5th April when the new statutory rates take effect, the 14/15 rate will be applied in Week 1 of tax year 15/16 (assuming the employee’s pay date coincides with this week).
The employee’s next statutory payment week will thus commence on Wednesday 8th April and as this date falls after the 5th April, the new statutory payment rate for 15/16 will be applied going forward.