SSP & Self-isolation

Close to the start of the pandemic the rules regarding the payment of SSP were relaxed in relation to coronavirus absences and a rebate scheme introduced to help small employers recoup some of the costs of SSP. A "coronavirus absence" does not mean that the employee must be infected with coronavirus and includes periods of self-isolation resulting from contact with someone who has tested positive or prior to surgery. Note that self-isolation resulting from returning from another country does not count as eligible. The usual 3 waiting days are ignored but a period of incapacity for work (PIW) must still exist to be eligible.

An employer (with less than 250 employees) can claim up to 2 weeks SSP per employee in respect of coronavirus absences. At current rates this amounts to a maximum of £192.70 per employee. The 2 week limit applies for the duration of the scheme not for each tax year that it covers.

Note that the scheme has been closed on 30 September 2021. Only claims for absences between 13 March 2020 and 30 September 2021 will be eligible.

Health & Social Care Levy

Earlier this week the Government announced the introduction of a 1.25% levy for health and social care. This will be collected via an increase in National Insurance rates for 2022/23 and thereafter through a separately identified levy alongside NI. This increase will be applied to both employees and employers so is effectively a 2.5% increase in the overall NI charge. It is not yet known over what precise band of income the rates will be applied but, based on current rates, it would apply to earnings above £184 per week for employees and over £170 per week for employers.

No announcement has been made regarding Class 2 NI for the self employed but Class 4 will increase by 1.25%. There will also be an increase in the tax on dividends of the same amount bringing the basic rate charge up from 7.5% to 8.75% with higher rates also increasing. These changes will also apply from April 2022 onwards, not to the current tax year.