Are Employees Able to Receive Maternity Pay from HMRC?
When a company is declared formally insolvent, HMRC will continue to pay SMP for the full legal term, even after the company’s insolvency.
HMRC will only take over SMP payments from the week of the insolvency itself. All payments prior to this date remain the responsibility of the employer. This legislation is covered under The Employment Rights Act 1996[1]Trusted Source – GOV.UK – Employment Rights Act 1996 and Insolvency Act 1986[2]Trusted Source – GOV.UK – Insolvency Act 1986.
You can also call the HMRC Statutory Payments Disputes Team on 0300 322 9422 or write to them at HM Revenue and Customs, PT Operations, Statutory Payments Dispute Team, BX9 1AN if you have queries.
Statutory Maternity Pay During the Period Before a Company has Been Declared Insolvent
In certain situations, companies approaching insolvency do not have the funds to pay their employees but have yet to be wound up. In this scenario, an individual on statutory maternity leave could not depend upon HMRC for the payments since the company is not yet officially insolvent.
Women in this situation would become ‘preferred creditors’ and, as soon as the company enters insolvency, should request a claim form from the appointed insolvency practitioner. If the company assets are not sufficient to remunerate preferred creditors, this class of creditors have a right to be paid from the National Insurance fund.
References
The primary sources for this article are listed below, including the relevant laws and Acts which provide their legal basis.
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