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Chapter NIM02385

Document Cited in Related
Vincent
Published date11 April 2016
Record NumberNIM02385
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

If an employee has an accident or suffers an injury as a result of an incident involving a third party and their employer continues to pay their earnings while they are off work sick, include the earnings in gross pay for Class 1 NICs purposes.

In most instances employees will be entitled to Statutory Sick Pay (SSP) and, according to contractual arrangements, may also receive Occupational Sick Pay (OSP) for a period of time - usually geared to length of service with the employer

Where an employee claims damages from the third party, they are sometimes asked by the employer to make some form of restitution to the employer, but that does not change the character of the payments already provided to the employee, these are still earnings.

Include any such payments in gross pay if:

  • the employer does not have to pay the employee while they are sick as a result of an accident, but does so while the employee claims loss of earnings as damages from the party responsible for the accident; and
  • the employee does not have to repay the employer.

It is sometimes indicated that there is a ‘loss of earnings’ following an accident, but that is something for employee/employer and acting solicitor(s) to...

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