SSP reforms could close small businesses

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4 Mar 2014

The changes - which are due to come into effect on 6th April 2014 - will mean that businesses will no longer be able to recover statutory sick pay from HMRC. Currently most SMEs would be able to recover SSP paid through the PAYE system but under the new system, this will no longer be possible.

The smallest businesses - those with only one or two employees - are likely to be the hardest hit: SSP is currently £87.55 per week up to a maximum of 28 weeks meaning having someone go long-term sick could cost the employer up to £2,450. There is a very real fear that could push some of the country's smaller businesses - widely acknowledged as the backbone of the country - into an uneconomic position. This could be the last straw for businesses who are already struggling, ans we may see closures and redundancies as a result of this.

The reforms have come about after a review by Dame Carol Black which suggests that allowing employers to receover the SSP reduces their incentive to effectively manage absences.