Help me Please.

MOHMEDSALIM PATEL

I have just finished the CYE past paper June 2008 and do not understand the SSP RECOVERED.
As i been taught that If the Total nic for the year is less than 45000 pounds than employer can recover SSP Paid during the year.Now Model answer is confusing me.

Is there anyone who can explain me ?

Thanks in Advance.

payrollpro

Mohmedsalim,

I am not surprised you are confused because even seasoned and hardened payroll people like myself get confused as well. Whilst there are four statutory payments, SAP, SMP, SPP and SSP, they are split into two groups for a variety of purposes and one of those is recovery.

The recovery process you have described is the Small Employers Relief scheme, or SER, and applies only to SAP, SMP and SPP. It does not apply to SSP at all.

SSP recovery relies on the employer satisfying the criteria laid down in the Percentage Threshold Scheme, or PTS. This states that SSP can only be recovered if the amount of SSP in a tax month is high enough to exceed 13% of the total employees and employers NIC for that same tax month.

If this happens then the excess over 13% is recoverable. From my reading of the question and the answer you actually do not have enough information to be able to make the judgement and in order to test knowledge of it you would have to be given a lot more data so I suspect the AAT avoids the issue rather than burden the exam with such matters.

In practice many small businesses find that the cost of calculating the recovery exceeds the amount they would get back and so, in effect, don't bother. Its a bit of a mess but thats what we have to work with.

Hope this helps and if you are down to sit any exams this week, I wish you good luck.

Payrollpro

MOHMEDSALIM PATEL

Thank you very much

I really appreciate your time and support.

Thank you very much.

Friday payroll level 3

keep helping students like me by posting such useful information.

Thanks once again.