SMEs to be reimbursed for statutory sick pay during Coronavirus crisis

Government publishes review of IR35 off-payroll rules

Budget 2020: In the 2020 Budget announcement on 11 March 2020, Chancellor of the Exchequer Rishi Sunak announced that small and medium-sized enterprises (SMEs) will be able to claim a refund for statutory sick pay paid in relation to Covid-19 (Coronavirus).

As part of temporary legislation aimed at minimising the effects of the outbreak on UK businesses, employers with fewer than 250 members of staff will be eligible for a refund limited to two weeks per each employee who has claimed statutory sick pay as a result of the Coronavirus outbreak.

Sunak also announced that the government will be supporting SMEs that experience increased costs or disruptions to cash flow as a result of the virus. This will include expanding business rate reliefs and introducing a business disruption loan scheme for up to £1 million, and a £2.2 billion grant scheme.

A dedicated helpline with 2,000 staff has been promised for use by those who need a deferral period for their tax liabilities.

Kirsty Rogers, employment partner at DWF, said: “This [refund] announcement will come as a welcome relief for [SMEs which] undoubtedly will experience financial hardship as a result of the virus. The government has set out in the 2020 Budget a clear priority of protecting people’s jobs. While protecting the health and safety of the population is undoubtedly the number one priority; keeping the economy stable is also critical. Providing employers with this assistance is undoubtedly a step in the right direction.”

Charles Alberts, head of health management at Aon, said: “As a minimum, employers will need a system in place to identify how many people are off due to Covid-19 and their expected return date. They need to consider how they’ll record all absences, who will do so, where this data will be stored and how accessible it will be to HR and other stakeholders, how to ensure timely and accurate recording and how reliable the data will be for the different statutory sick pay rules that apply.

“It’s positive that businesses employing less than 250 people will be supported by government for up to 14 days of individual employee absence due to Covid-19. These measures further illustrate the case for a proactive approach to absence management. No matter what size the business, unplanned absences have a detrimental impact and, therefore, there is an imperative to manage all cases proactively to minimise the impact.”