Asked by: Baroness Penn (Conservative - Life peer)
Question to the Department for Work and Pensions:
To ask His Majesty's Government when the threshold for qualifying for Small Employers' Relief was last up-rated, and from what level.
Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)
Small employers (those who have gross Class 1 National Insurance contributions liability of £45,000 or less in the previous tax year) can claim what is known as Small Employers Relief and can recover 100 percent of Statutory Maternity Pay they have paid out plus an additional compensation payment. This additional compensation payment is known as Small Employers’ Compensation and seeks to support small employers with the associated costs of having an employee on maternity leave which are not thought to affect large employers in the same way, such as the employer’s share of National Insurance contributions that might be payable, as well as administration and recruitment costs.
The same reimbursement arrangements apply to Statutory Paternity Pay, Statutory Shared Parental Pay, Statutory Adoption Pay, Statutory Parental Bereavement Pay and Statutory Neonatal Care Pay.
The threshold for qualifying as a small employer was increased in April 2004 from £40,000 to £45,000 (or less) of gross Class 1 National Insurance contributions liability in the previous tax year.
Asked by: Baroness Penn (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how many payments of statutory (1) maternity, (2) paternity, and (3) adoption, pay were reclaimed from His Majesty's Revenue and Customs at (a) the standard rate of 92 per cent, and (b) the Small Employers' Relief rate of 108.5 per cent, in each of the last 10 tax years.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Data for statutory payments for the financial year 2024-25 has not yet been fully analysed as the financial year has only recently ended. Data for financial years 2019-20 until 2023-24 is provided below. HMRC do not have data readily available for Statutory payments before 2019-20 and the relevant data could only be collated and verified for the purpose of answering this question at disproportionate cost.
The tables below show the number of PAYE schemes claiming each statutory payment by tax year. Note that the scheme count for reclaims does not reflect the total number of reclaims, as schemes may submit multiple claims within a single tax year.
Statutory Maternity Pay | ||
Date | Number of schemes | Number of schemes |
2019-20 | 138,100 | 62,200 |
2020-21 | 132,900 | 62,800 |
2021-22 | 134,500 | 63,000 |
2022-23 | 132,500 | 61,000 |
2023-24 | 130,200 | 58,600 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) PAYE scheme counts have been rounded to nearest 100.
3) The table shows the count of PAYE schemes with reclaims, using schemes as a proxy for business count.
Statutory Paternity Pay | ||
Date | Number of schemes | Number of schemes |
2019-20 | 55,100 | 13,800 |
2020-21 | 44,200 | 10,200 |
2021-22 | 53,600 | 14,600 |
2022-23 | 54,600 | 15,700 |
2023-24 | 56,200 | 15,000 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) PAYE scheme counts have been rounded to nearest 100.
3) The table shows the count of PAYE schemes with reclaims, using schemes as a proxy for business count.
Statutory Adoption Pay | ||
Date | Number of schemes | Number of schemes |
2019-20 | 3,100 | 400 |
2020-21 | 2,800 | 300 |
2021-22 | 2,900 | 300 |
2022-23 | 2,800 | 400 |
2023-24 | 2,900 | 400 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) PAYE scheme counts have been rounded to nearest 100.
3) The table shows the count of PAYE schemes with reclaims, using schemes as a proxy for business count.
The data below summarises the total number of employers with Employer National Insurance Contributions (NICs) liabilities of £45,000 or less for the financial years 2022–23 to 2024–25. HMRC does not hold readily available data on the number of employers by the value of their total Employer NIC liabilities for years prior to 2022–23, and the relevant data could only be collated and verified for the purpose of answering this question at disproportionate cost.
| 2022-23 | 2023-24 | 2024-25 |
Number of Employers with Employer NIC liabilities of £45,000 or under | 1,551,000 | 1,580,000 | 1,621,000 |
Notes:
1) Figures rounded to nearest thousand.
2) Figures include employers whose Employer NIC liabilities = £0
3) Figures exclude employers whose Employer NIC liabilities are unknown.
4) Data is RTI data matched to Business Lookup Table data.
The Small Employer’s Relief is a flat rate for all qualifying employers whose Employer National Insurance Contributions (Employer NICs) were £45,000 or under in the previous tax year.
The rate is split into two parts; 100% of the payment of Statutory Pay, plus an additional amount to cover the Employer NIC liabilities arising from the Statutory Pay.
It is calculated based on the rules for Statutory Maternity Pay, which makes up the majority of the claims received. Statutory Maternity Pay level is equal to 90% of average weekly earnings for the first 6 weeks, and the lower of £187.18 and 90% of average weekly earnings for the subsequent 33 weeks. [N.B. Taken from here: https://www.gov.uk/maternity-pay-leave/pay]
Prior to April 2025, the Small Employer’s Relief rate was 103%. From April 2025, Employer NICs is charged at a rate of 15% on earnings salary over £96 a week (equivalent to £5,000 a year). The 8.5% therefore reflects the value of Employer NICs at the current rate as a percentage of Statutory Maternity Pay over the 39 weeks the employee is eligible for.
Asked by: Baroness Penn (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what estimate they have made of the number of businesses who have class 1 National Insurance contributions of £45,000 or less in each of the past 10 tax years.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Data for statutory payments for the financial year 2024-25 has not yet been fully analysed as the financial year has only recently ended. Data for financial years 2019-20 until 2023-24 is provided below. HMRC do not have data readily available for Statutory payments before 2019-20 and the relevant data could only be collated and verified for the purpose of answering this question at disproportionate cost.
The tables below show the number of PAYE schemes claiming each statutory payment by tax year. Note that the scheme count for reclaims does not reflect the total number of reclaims, as schemes may submit multiple claims within a single tax year.
Statutory Maternity Pay | ||
Date | Number of schemes | Number of schemes |
2019-20 | 138,100 | 62,200 |
2020-21 | 132,900 | 62,800 |
2021-22 | 134,500 | 63,000 |
2022-23 | 132,500 | 61,000 |
2023-24 | 130,200 | 58,600 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) PAYE scheme counts have been rounded to nearest 100.
3) The table shows the count of PAYE schemes with reclaims, using schemes as a proxy for business count.
Statutory Paternity Pay | ||
Date | Number of schemes | Number of schemes |
2019-20 | 55,100 | 13,800 |
2020-21 | 44,200 | 10,200 |
2021-22 | 53,600 | 14,600 |
2022-23 | 54,600 | 15,700 |
2023-24 | 56,200 | 15,000 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) PAYE scheme counts have been rounded to nearest 100.
3) The table shows the count of PAYE schemes with reclaims, using schemes as a proxy for business count.
Statutory Adoption Pay | ||
Date | Number of schemes | Number of schemes |
2019-20 | 3,100 | 400 |
2020-21 | 2,800 | 300 |
2021-22 | 2,900 | 300 |
2022-23 | 2,800 | 400 |
2023-24 | 2,900 | 400 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) PAYE scheme counts have been rounded to nearest 100.
3) The table shows the count of PAYE schemes with reclaims, using schemes as a proxy for business count.
The data below summarises the total number of employers with Employer National Insurance Contributions (NICs) liabilities of £45,000 or less for the financial years 2022–23 to 2024–25. HMRC does not hold readily available data on the number of employers by the value of their total Employer NIC liabilities for years prior to 2022–23, and the relevant data could only be collated and verified for the purpose of answering this question at disproportionate cost.
| 2022-23 | 2023-24 | 2024-25 |
Number of Employers with Employer NIC liabilities of £45,000 or under | 1,551,000 | 1,580,000 | 1,621,000 |
Notes:
1) Figures rounded to nearest thousand.
2) Figures include employers whose Employer NIC liabilities = £0
3) Figures exclude employers whose Employer NIC liabilities are unknown.
4) Data is RTI data matched to Business Lookup Table data.
The Small Employer’s Relief is a flat rate for all qualifying employers whose Employer National Insurance Contributions (Employer NICs) were £45,000 or under in the previous tax year.
The rate is split into two parts; 100% of the payment of Statutory Pay, plus an additional amount to cover the Employer NIC liabilities arising from the Statutory Pay.
It is calculated based on the rules for Statutory Maternity Pay, which makes up the majority of the claims received. Statutory Maternity Pay level is equal to 90% of average weekly earnings for the first 6 weeks, and the lower of £187.18 and 90% of average weekly earnings for the subsequent 33 weeks. [N.B. Taken from here: https://www.gov.uk/maternity-pay-leave/pay]
Prior to April 2025, the Small Employer’s Relief rate was 103%. From April 2025, Employer NICs is charged at a rate of 15% on earnings salary over £96 a week (equivalent to £5,000 a year). The 8.5% therefore reflects the value of Employer NICs at the current rate as a percentage of Statutory Maternity Pay over the 39 weeks the employee is eligible for.
Asked by: Baroness Penn (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government why the specific figure of 108.5 per cent was decided upon for the rate at which Small Employers' Relief is paid.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Data for statutory payments for the financial year 2024-25 has not yet been fully analysed as the financial year has only recently ended. Data for financial years 2019-20 until 2023-24 is provided below. HMRC do not have data readily available for Statutory payments before 2019-20 and the relevant data could only be collated and verified for the purpose of answering this question at disproportionate cost.
The tables below show the number of PAYE schemes claiming each statutory payment by tax year. Note that the scheme count for reclaims does not reflect the total number of reclaims, as schemes may submit multiple claims within a single tax year.
Statutory Maternity Pay | ||
Date | Number of schemes | Number of schemes |
2019-20 | 138,100 | 62,200 |
2020-21 | 132,900 | 62,800 |
2021-22 | 134,500 | 63,000 |
2022-23 | 132,500 | 61,000 |
2023-24 | 130,200 | 58,600 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) PAYE scheme counts have been rounded to nearest 100.
3) The table shows the count of PAYE schemes with reclaims, using schemes as a proxy for business count.
Statutory Paternity Pay | ||
Date | Number of schemes | Number of schemes |
2019-20 | 55,100 | 13,800 |
2020-21 | 44,200 | 10,200 |
2021-22 | 53,600 | 14,600 |
2022-23 | 54,600 | 15,700 |
2023-24 | 56,200 | 15,000 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) PAYE scheme counts have been rounded to nearest 100.
3) The table shows the count of PAYE schemes with reclaims, using schemes as a proxy for business count.
Statutory Adoption Pay | ||
Date | Number of schemes | Number of schemes |
2019-20 | 3,100 | 400 |
2020-21 | 2,800 | 300 |
2021-22 | 2,900 | 300 |
2022-23 | 2,800 | 400 |
2023-24 | 2,900 | 400 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) PAYE scheme counts have been rounded to nearest 100.
3) The table shows the count of PAYE schemes with reclaims, using schemes as a proxy for business count.
The data below summarises the total number of employers with Employer National Insurance Contributions (NICs) liabilities of £45,000 or less for the financial years 2022–23 to 2024–25. HMRC does not hold readily available data on the number of employers by the value of their total Employer NIC liabilities for years prior to 2022–23, and the relevant data could only be collated and verified for the purpose of answering this question at disproportionate cost.
| 2022-23 | 2023-24 | 2024-25 |
Number of Employers with Employer NIC liabilities of £45,000 or under | 1,551,000 | 1,580,000 | 1,621,000 |
Notes:
1) Figures rounded to nearest thousand.
2) Figures include employers whose Employer NIC liabilities = £0
3) Figures exclude employers whose Employer NIC liabilities are unknown.
4) Data is RTI data matched to Business Lookup Table data.
The Small Employer’s Relief is a flat rate for all qualifying employers whose Employer National Insurance Contributions (Employer NICs) were £45,000 or under in the previous tax year.
The rate is split into two parts; 100% of the payment of Statutory Pay, plus an additional amount to cover the Employer NIC liabilities arising from the Statutory Pay.
It is calculated based on the rules for Statutory Maternity Pay, which makes up the majority of the claims received. Statutory Maternity Pay level is equal to 90% of average weekly earnings for the first 6 weeks, and the lower of £187.18 and 90% of average weekly earnings for the subsequent 33 weeks. [N.B. Taken from here: https://www.gov.uk/maternity-pay-leave/pay]
Prior to April 2025, the Small Employer’s Relief rate was 103%. From April 2025, Employer NICs is charged at a rate of 15% on earnings salary over £96 a week (equivalent to £5,000 a year). The 8.5% therefore reflects the value of Employer NICs at the current rate as a percentage of Statutory Maternity Pay over the 39 weeks the employee is eligible for.
Asked by: Baroness Penn (Conservative - Life peer)
Question to the Department for Education:
To ask His Majesty's Government what is the per-pupil funding when taking into account increased National Insurance contributions costs and increased eligibility for free school meals in each year of the Spending Review 2025 (CP1336); and what assessment they have made the level of per-pupil funding in those years compared to (1) 2023–24, and (2) 2024–25.
Answered by Baroness Smith of Malvern - Minister of State (Minister for Women and Equalities)
The department is providing schools with over £930 million in the 2025/26 financial year to support schools with the increases to employer National Insurance contributions from April 2025. This funding will be rolled into the schools national funding formula from 2026/27, ensuring that this additional funding forms an on-going part of schools’ core budgets. Total schools funding will increase by a further £4.2 billion, by the end of the Spending Review period.
Asked by: Baroness Penn (Conservative - Life peer)
Question to the Department for Education:
To ask His Majesty's Government whether the National Insurance contributions grant for schools is included in spending and allocations for schools in the future years of the Spending Review 2025 (CP1336).
Answered by Baroness Smith of Malvern - Minister of State (Minister for Women and Equalities)
The department is providing mainstream schools and high needs settings with over £930 million to support them with the increases to employer National Insurance contributions (NICs) from April 2025. Payments will be made to local authorities in September 2025 and to academies in October 2025.
The NICs funding will be rolled into the schools national funding formula (NFF) from the 2026/27 financial year to ensure this funding remains a protected part of school budgets.
Asked by: Baroness Penn (Conservative - Life peer)
Question to the Department for Education:
To ask His Majesty's Government what is the value of the National Insurance contributions grant for schools, and when will that grant be paid.
Answered by Baroness Smith of Malvern - Minister of State (Minister for Women and Equalities)
The department is providing mainstream schools and high needs settings with over £930 million to support them with the increases to employer National Insurance contributions (NICs) from April 2025. Payments will be made to local authorities in September 2025 and to academies in October 2025.
The NICs funding will be rolled into the schools national funding formula (NFF) from the 2026/27 financial year to ensure this funding remains a protected part of school budgets.
Asked by: Baroness Penn (Conservative - Life peer)
Question to the Department for Education:
To ask His Majesty's Government whether the National Insurance contributions grant for schools will be paid in each year of the Spending Review 2025 (CP1336).
Answered by Baroness Smith of Malvern - Minister of State (Minister for Women and Equalities)
The department is providing mainstream schools and high needs settings with over £930 million to support them with the increases to employer National Insurance contributions (NICs) from April 2025. Payments will be made to local authorities in September 2025 and to academies in October 2025.
The NICs funding will be rolled into the schools national funding formula (NFF) from the 2026/27 financial year to ensure this funding remains a protected part of school budgets.
Asked by: Baroness Penn (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how many reclaims for statutory paternity pay there have been in each of the past five years, broken down by size of business.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
A breakdown of total reclaims for the financial years 2019–20 to 2023–24 is available below. However, data for 2024–25 has not yet been analysed as the tax year has only recently ended.
Further breakdowns of information by size of business are not currently available from published statistics, and collating and verifying the relevant data solely for the purpose of answering this question would incur disproportionate cost.
Date | Sum Recoveries | Count Recoveries |
19/20 | £50,300,000 | 55,100 |
20/21 | £43,800,000 | 44,200 |
21/22 | £52,400,000 | 53,600 |
22/23 | £52,600,000 | 54,600 |
23/24 | £61,500,000 | 56,200 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) Sum recoveries rounded to nearest £100,000.
3) Count of recoveries rounded to nearest 100.
Asked by: Baroness Penn (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government how much statutory paternity pay was reclaimed by businesses in each of the past five years, broken down by size of business.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
A breakdown of total reclaims for the financial years 2019–20 to 2023–24 is available below. However, data for 2024–25 has not yet been analysed as the tax year has only recently ended.
Further breakdowns of information by size of business are not currently available from published statistics, and collating and verifying the relevant data solely for the purpose of answering this question would incur disproportionate cost.
Date | Sum Recoveries | Count Recoveries |
19/20 | £50,300,000 | 55,100 |
20/21 | £43,800,000 | 44,200 |
21/22 | £52,400,000 | 53,600 |
22/23 | £52,600,000 | 54,600 |
23/24 | £61,500,000 | 56,200 |
Notes:
1) Data collected using HMRC Real Time Information (RTI) and extracted in December 2024. RTI is subject to revision or updates.
2) Sum recoveries rounded to nearest £100,000.
3) Count of recoveries rounded to nearest 100.