Statutory Sick Pay Act 1991

2 Small employers' relief

(1) In section 9 of the [1982 c. 24.] Social Security and Housing Benefits Act 1982, before subsection (2) (meaning of “contributions payments”) there shall be inserted—

“(1B) For the purposes of this section, a payment of statutory sick pay which an employer is liable to make to an employee for any day which forms part of a period of incapacity for work qualifies for small employers' relief if—

(a) on that day the employer is a small employer who has been liable to pay statutory sick pay in respect of that employee for earlier days forming part of that period of incapacity for work; and

(b) the aggregate amount of those payments exceeds the entitlement threshold, that is to say, an amount equal to

W × R

, where—

• W is a prescribed number of weeks; and

• R is the appropriate weekly rate set out in section 7 above;

and regulations may make provision for calculating the entitlement threshold in any case where the employee’s entitlement to statutory sick pay is calculated by reference to different weekly rates in the same period of incapacity for work.

(1C) If the Secretary of State by order so provides for any tax year, the following subsections shall have effect for that tax year in substitution for subsection (1B) above—

“(1BB) For the purposes of this section, a payment of statutory sick pay which an employer is liable to make to an employee for any day in a tax year qualifies for small employers' relief if—

(a) on that day the employer is a small employer who has been liable to make payments of statutory sick pay for earlier days in that tax year in respect of any employees of his; and

(b) the aggregate of any such payments for those earlier days exceeds a prescribed sum.

(1BC) In any case where—

(a) an employer is liable to make two or more payments of statutory sick pay for the same day in a tax year, and

(b) by virtue of the condition in subsection (1BB)(b) above, none of those payments would qualify for small employers' relief, but

(c) that condition would have been fulfilled in relation to a proportion of the aggregate amount of those payments, had he been liable—

(i) to pay as statutory sick pay for an earlier day in that tax year, instead of for the day in question, the smallest part of that aggregate that would enable that condition to be fulfilled, and

(ii) to pay the remainder as statutory sick pay for the day in question,

he shall be treated for the purposes of subsection (1BB) above as if he had been liable to make payments of statutory sick pay as mentioned in paragraph (c) above instead of as mentioned in paragraph (a) above.

(1BD) If, in a case not falling within subsection (1BC) above—

(a) an employer is liable to make a single payment of statutory sick pay for a day in a tax year, and

(b) by virtue of the condition in subsection (1BB)(b) above, that payment would not qualify for small employers' relief, but

(c) that condition would have been fulfilled in relation to a proportion of that payment, had he been liable—

(i) to pay as statutory sick pay for an earlier day in that tax year, instead of for the day in question, the smallest part of that payment that would enable that condition to be fulfilled, and

(ii) to pay the remainder as statutory sick pay for the day in question,

he shall be treated for the purposes of subsection (1BB) above as if he had been liable to make payments of statutory sick pay as mentioned in paragraph (c) above instead of the payment mentioned in paragraph (a) above.”;and, without prejudice to section 45(1) below, the Secretary of State may by regulations make such transitional or consequential provision or savings as he considers necessary or expedient in connection with the coming into force of an order under this subsection or the expiry or revocation of any such order and the consequent revival of subsection (1B) above.

(1D) For the purposes of this section, “small employer” shall have the meaning assigned to it by regulations, and, without prejudice to the generality of the foregoing, any such regulations—

(a) may define that expression by reference to the amount of an employer’s contributions payments for any prescribed period; and

(b) if they do so, may in that connection make provision for the amount of those payments for that prescribed period—

(i) to be determined without regard to any deductions that may be made from them under this section or under any other enactment or instrument; and

(ii) in prescribed circumstances, to be adjusted, estimated or otherwise attributed to him by reference to their amount in any other prescribed period.

(1E) If and so long as regulations under subsection (1D) above prescribe an amount which an employer’s contributions payments must not exceed if he is to be a small employer for the purposes of this section, the Secretary of State shall in each tax year consider whether that amount should be increased, having regard to any increase in the aggregate amount of all primary and secondary Class 1 contributions payable in Great Britain and such other matters as he considers appropriate.

(1F) A statutory instrument containing (whether alone or with other provisions) any regulations or order under or by virtue of subsection (1B), (1C) or (1D) above shall not be made unless a draft of it has been laid before Parliament and approved by a resolution of each House.”

(2) In subsection (2) of that section (meaning of “contributions payments” in subsections (1)(a) and (1A)) for the words “and subsection (1A)” there shall be substituted the words “and subsection (1D)”.

(3) In Part II of Schedule 5 to the [1986 c. 50.] Social Security Act 1986 (questions for the Secretary of State) in paragraph (b), after sub-paragraph (v) there shall be inserted the words “or

(vi) the amount of an employer’s contributions payments for any period for the purposes of regulations under section 9(1D) of that Act;”.

(4) The first regulations made under section 9 of the [1982 c. 24.] Social Security and Housing Benefits Act 1982 by virtue of this section shall—

(a) specify 6 as the prescribed number of weeks for the purposes of subsection (1B)(b) of that section; and

(b) without prejudice to subsection (1D)(b) of that section, define a “small employer” as an employer whose contributions payments for the tax year preceding the one in which the day of incapacity for work in question falls did not exceed £15,000.

(5) Any day of incapacity for work falling before 6th April 1991 shall be left out of account for the purposes of subsection (1B) of that section.