Advanced Statutory Maternity Pay

Record your SMP as normal on the pay run
At the end of your P32 period, run your P32 report

The correct amount you need to pay to HMRC this period is:

The Revised Amount Due + SMP reclaim values this period (Line 20 on the P32 report).

For example:
The revised amount due this period is -£200 (shown as a value in brackets).
This is inclusive of a £500 reclaim of SMP (Line 20).
The actual amount you need to pay HMRC in real-life is: -£200 + £500 = £300
When you’re recording the P32 payment:
- Leave the calculated amount due in the Amount to Pay to HMRC box
- Select a payment date
- If a reclaim calculates for the period, select Bank Transfer as the HMRC Refund option. Enter your bank account details
- CAUTION: No P32 payment values submit to HMRC on the EPS. This just confirms recovery amounts for the statutory payments processed in the reporting period. Also, HMRC won’t issue a refund where one isn’t due
- On step 2, then enter any CIS values you need to report to HMRC
- Continue to step 3 and confirm the submission

Where Sage Accounting links to Payroll, payroll journals post when you complete a pay run. They also post when you record your P32 payment.

If you’ve received advanced funding for SMP, you need to first record this in Accounting. Then after each P32 period, you must post a manual journal to correct your payroll postings.

Receipt of funding journal

TIP: Nominal 1200 Bank is the default in these journals. It’s the default bank account for payroll postings. If you use another, then substitute this with the relevant nominal where applicable.

Ledger Account	Details	Debit	Credit	Included on VAT Return?
Bank (1200)	Total of Advanced SMP received	£5000	£0	No
Statutory Maternity Pay (7011)	Total of Advanced SMP received	£0	£5000	No

You must follow the steps in the Payroll section above and record the system calculated amounts due for all P32 periods that include reclaiming Statutory Maternity Pay.

Correction Journals

These need to post after every recorded P32 payment made in Payroll. It’s best to record the journal date as being the same as that used for the P32 payment. You can get the Statutory Maternity recovery values from the P32 report in payroll. You can also see the Detailed Audit Trail postings in Accounting for the Revenue payment.

Ledger Account	Details	Debit	Credit	Included on VAT Return?
7011	SMP reclaimed total this period	£500	£0	No
2211		£0	£500	No
2211		£500	£0	No
1200	Additional amount due to HMRC this period	£0	£500	N0

After processing this journal, your bank account will show two transactions. When totalled together will equal the real-life amount paid to HMRC for the period.