HMRC employer update: statutory pay, payroll reporting and key actions for spring 2026
The latest updates bring together several issues that could affect employers immediately. HMRC’s statutory payments webinar email focuses on Statutory Maternity Pay, Statutory Paternity Pay and Statutory Sick Pay, while the April 2026 Employer Bulletin expands into wider employer obligations, including benefits in kind, Real Time Information payroll ID errors, homeworking tax relief, the official rate of interest and changes to Statutory Sick Pay.
For the IAB audience, that matters because these are not theoretical changes. They affect live payroll runs, employee communication, reporting deadlines and compliance controls. Ignore them, and you create avoidable errors. Deal with them early, and the year becomes easier to manage.
Statutory payments remain a priority for employers
One of the clearest messages from HMRC is that employers still need support with statutory payments. Its latest communication promotes live webinars covering Statutory Maternity Pay, Statutory Paternity Pay and Statutory Sick Pay. These sessions focus on qualifying conditions, how much to pay, how to use the online calculator, how to claim back statutory payments where allowed, and the record keeping that sits behind the whole process.
That should be taken seriously. If HMRC is still pushing education in this area, it is because payroll errors around eligibility, calculation and evidence are still common enough to matter. Employers that treat statutory pay as an occasional admin task rather than a controlled process are leaving room for preventable mistakes.
Good payroll administration is not just about making a payment. It means confirming entitlement, applying the correct rates, keeping supporting records and making sure any reclaim is handled properly. Weak process here usually shows up later as corrections, complaints or reporting issues.
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Statutory payments remain a priority for employers
One of the clearest messages from HMRC is that employers still need support with statutory payments. Its latest communication promotes live webinars covering Statutory Maternity Pay, Statutory Paternity Pay and Statutory Sick Pay. These sessions focus on qualifying conditions, how much to pay, how to use the online calculator, how to claim back statutory payments where allowed, and the record keeping that sits behind the whole process.
That should be taken seriously. If HMRC is still pushing education in this area, it is because payroll errors around eligibility, calculation and evidence are still common enough to matter. Employers that treat statutory pay as an occasional admin task rather than a controlled process are leaving room for preventable mistakes.
Good payroll administration is not just about making a payment. It means confirming entitlement, applying the correct rates, keeping supporting records and making sure any reclaim is handled properly. Weak process here usually shows up later as corrections, complaints or reporting issues.
Statutory Sick Pay changed from 6 April 2026
One of the biggest operational changes is Statutory Sick Pay. HMRC says that, from 6 April 2026, eligible employees are entitled to SSP regardless of income because the Lower Earnings Limit has been removed. HMRC also says that SSP is now paid from the first full day of sickness absence, not from day four, and is paid at 80% of normal weekly earnings or the weekly flat rate of £123.25, whichever is lower. You can read HMRC’s summary in the April 2026 Employer Bulletin.
This is not a cosmetic update. It changes both eligibility and timing. Lower-paid employees who may previously have fallen outside SSP may now qualify, and employers need to be sure that payroll systems, internal policies and manager guidance have all been updated to reflect the new rules.
If payroll is run in-house, the software and internal procedures need checking now. If payroll is outsourced, employers should confirm that their provider has already applied the changes. Waiting until the next sickness case lands is weak process, not sensible planning.
Small employers should review statutory pay recovery
HMRC has also confirmed that the Small Employers’ Relief compensation rate increased to 9% from 6 April 2026. Employers that qualify, those that have paid £45,000 or less in Class 1 National Insurance contributions, can reclaim 100% of qualifying statutory payments plus an additional 9% compensation. HMRC states that this means qualifying small employers can reclaim 109%, while other employers can usually reclaim 92%. Statutory Sick Pay remains the exception and cannot be reclaimed.
That is worth reviewing properly. Smaller employers should not only focus on making statutory payments correctly. They should also check that they are recovering what they are entitled to recover. A weak statutory pay process does not just create payroll errors. It can also create unnecessary financial leakage.
Benefits in kind reporting still needs control
Benefits in kind remain another area where employers drift into trouble through poor year-end discipline. HMRC says that, for employers who do not yet payroll expenses and benefits, the deadline for reporting P11D(b), P11D expenses and benefits in kind for the tax year ending 5 April 2026 is 6 July 2026. HMRC also says that late submission may result in a penalty.
For the 2026 to 2027 tax year, HMRC says that any employer not registered to payroll benefits in kind by the 5 April 2026 deadline must continue to report employee benefits using a P11D for each employee and a P11D(b) for Class 1A National Insurance contributions. Those forms must then be submitted by 6 July 2027, following the end of the tax year.
The main point is simple. Employers need one clear reporting route, one clear owner and one clear timetable. Half-payrolled and half-manual reporting is where mistakes multiply.
RTI payroll ID errors are still causing avoidable problems
HMRC has also highlighted continuing Real Time Information submission problems caused by incorrect handling of payroll ID. HMRC says duplicate employments are still being created when a payroll ID changes but the payroll ID change indicator is not used, or when the old payroll ID is not provided. It also says errors occur when employers enter a start date or a starter declaration instead of using the payroll ID change indicator.
That may sound technical, but it is really a control issue. Weak payroll ID handling creates duplicate employments, wrong year-to-date information, split RTI data and manual correction work that should never have been needed. HMRC also warns against reusing payroll IDs for different employees and against submitting nil taxable pay where a payment has been made.
Employers should review how payroll ID changes are handled, whether the old and new IDs are being recorded correctly and whether their submissions follow HMRC’s logic for genuine starters versus continuing employees. This is dull work, but it prevents messy downstream problems.
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Homeworking tax relief has changed, but employer reimbursements still matter
HMRC has confirmed that, from 6 April 2026, employees can no longer claim a deduction from Income Tax from HMRC for additional household costs where they are required to work from home, such as increased utility costs and business telephone calls. HMRC says employees can still make eligible claims for the previous four tax years where they have not already done so. You can read the change in the April 2026 Employer Bulletin.
However, HMRC also states that this change does not affect the current rules that allow employers to reimburse eligible homeworking costs without deducting Income Tax or National Insurance contributions. In the same bulletin, HMRC explains that new exemptions also apply from 6 April 2026 where employers reimburse certain work-related costs, including some eye tests, seasonal flu vaccinations and eligible homeworking equipment.
The obvious implication is that employers should revisit reimbursement policy, not assume support has disappeared. Personal employee relief has narrowed. Employer-funded reimbursement still matters.
The official rate of interest still needs monitoring
HMRC has confirmed that the official rate of interest remains at 3.75% from 6 April 2026. HMRC also says the rate will now be reviewed quarterly, with potential changes taking effect on 6 April 2026, 6 July 2026, 6 October 2026 and 6 January 2027.
This matters for employers that provide employment-related loans or some forms of living accommodation, because HMRC uses that rate to calculate the Income Tax charge on the benefit. If a business has any exposure here, someone needs to be responsible for monitoring the rate during the year rather than only checking it at year end.
What employers should do now
The strongest employers are not the ones who scramble when HMRC updates something. They are the ones who use updates like this to tighten process early. That means reviewing statutory pay workflows, checking SSP settings, confirming your benefits in kind route, tightening RTI payroll ID handling and revisiting any homeworking reimbursement policy that may now be out of date.
For IAB members, this is another reminder that payroll and compliance are not fixed disciplines. Rules move, HMRC expectations change and weak internal controls get exposed sooner or later. A reliable payroll function is not just about paying people. It is about controlling compliance risk before it turns into correction work.
