As a contractor working through your own limited company, sick pay is something you need to consider as, ordinarily, the payment of Statutory Sick Pay (SSP) is a cost for an employer to bear.
You may, therefore, put money aside each month to cover yourself if you, unfortunately, fall ill, or just accept that if you are not generating any income working on an assignment, you will not be paid.
However, we’re currently not experiencing ordinary times. When Rishi Sunak delivered the budget on 16th March, he announced a raft of measures aimed at supporting UK businesses through the COVID-19 crisis. One of these measures was the Coronavirus Statutory Sick Pay Rebate Scheme, which contractors working through limited companies may be able to claim.
The online service to facilitate this claim will go live on 26th May, but what is the scheme and who qualifies? Read on as we discuss.
What is the Coronavirus Statutory Sick Pay Rebate Scheme?
The Coronavirus Statutory Sick Pay Rebate Scheme allows small and medium-sized employers, with fewer than 250 employees, to reclaim the costs of coronavirus-related SSP, provided there was a PAYE scheme in place prior to 28th February 2020.
The current rate of SSP is £95.85 per week and under the scheme you can reclaim up to two weeks SSP for each employee that has been absent from work because they have coronavirus or because they are self-isolating and unable to work from home.
You may also reclaim the cost of SSP if you or an employee are shielding due to a high risk of severe illness from coronavirus. This is the case for absences that started on or after 16th April 2020. However, given that those in high-risk categories have typically been advised to shield for 12 weeks and you can only reclaim up to two weeks SSP costs, you may wish to consider furlough instead. You can reclaim up to 80% of the salary costs for furloughed employees under the Coronavirus Job Retention Scheme, you can find out more about this here. If you are already claiming under the Coronavirus Job Retention Scheme, you are not able to reclaim SSP for the same period.
There is nothing to prevent you from paying yourself and any employees you have, more than the current rate of SSP in sick pay, however regardless of the amount you pay, you will only be able to reclaim a maximum of £95.85 per week.
How do I make a claim?
Hopefully, you won’t need to make a claim. However, if you have been absent from work due to coronavirus, the online service facilitating the reclaim of SSP will be launched on 26th May.
The government have confirmed that your authorised agent can complete the online application for you. If we are registered as your agent with HMRC we will be able to do this for you at no extra charge, just send an email to your dedicated personal accountant.
There is no requirement to provide a doctor’s fit note however you will need to keep a record of the dates of the period of absence relating to COVID-19 and, if you would like us to make the claim for you, you will need to provide this information to your accountant.