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Chapter SPM171900

Document Cited authorities 2 Cited in Related
Vincent
Published date15 April 2016
Record NumberSPM171900
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

If an employee does not qualify for SMP/SAP/ShPP/SPP because their AWE are less than the LEL for NICs purposes, they may be able to qualify if benefits and/or expenses were paid to them during the relevant period.

The employer must check whether they received any benefits and/or expenses during the relevant period, which would have attracted a Class 1 NICs liability, but:

  • were subject to a PAYE Settlement Agreement and
  • were benefits subject to Class 1B NICs.

If so, they must re-calculate the AWE including all the benefit/expense payments which would have attracted Class 1 NICs if they had not been included in a PAYE settlement agreement.

Where a back dated pay award covers a relevant period (where earnings included in a PAYE settlement agreement have already been taken into account), AWE should be calculated as follows:

  • use the original earnings excluding any earnings which attract liability to Class 1B NICs
  • add on the back dated pay award, and
  • if the earnings are still below the qualifying...

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