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Paul Gosling

Change to sick pay rules set to impact small businesses

New sick pay rules planned for April could have a big impact on smaller employers but few appear to be aware of the impending changes.

Currently, employers pay an absent employee £86.70 a week statutory sick pay, but can start to recover this via their payroll once the outlay exceeds 13 per cent of their total National Insurance bill.

But from April employers will no longer be able to recover the sick pay, which then rises to £87.55 a week.

Banks Chartered Accountants have found that many businesses appear to be unaware of this change – where an employee goes on long-term sick leave not only will the employer be unable to reclaim the sick pay they may also end up paying for any long-term replacement.

“Businesses with one or two employees will be hardest hit if the business is based on both employees working and bringing in an income and one goes on long-term sick leave,” said Paul Gosling, Head of Tax at Banks. “It would mean a drop in income for the business but no relief to recover the sick payments.”

The Department for Works and Pensions has scrapped the relief because it feels the current rebate situation does not provide an incentive for employers to get sick employees back to work.

Paul added that employers still have until the end of 2015/16 to recover statutory sick pay for sickness absences occurring before the end of 2013/14.

For more information, or help with issues regarding statutory sick play, please get in touch with Paul on 01793 839977, or visit

Pictured: Paul Gosling, Head of Tax, Banks