Small businesses will be able to recover slightly more of the cost of Statutory Maternity Pay (SMP) from April 2026 under new regulations introduced by the government.
The Social Security and Statutory Maternity Pay (Evidence of Pregnancy and Compensation of Employers) (Amendment) Regulations 2026 (SI 2026/201) increase the Small Employers’ Relief compensation rate from 108.5% to 109% of SMP and also update the rules governing maternity evidence.
The changes take effect in stages. Updates affecting maternity allowance evidence begin on 1 April 2026. The changes affecting Statutory Maternity Pay and employer compensation take effect on 6 April 2026 at the start of the new tax year.
Increase to Small Employers’ Relief
The main practical impact for small businesses is the increase in the compensation rate that applies when reclaiming Statutory Maternity Pay.
Employers pay SMP to eligible employees through payroll and recover the payments from HMRC. Most employers can reclaim 92% of SMP, but smaller employers may qualify for an enhanced recovery rate.
What is Small Employers’ Relief?
Small Employers’ Relief allows qualifying employers to recover the full amount of SMP they have paid, plus an additional percentage intended to offset employer National Insurance costs.
The legislation refers to this additional payment as Small Employers Compensation, although employers and HMRC commonly refer to the mechanism as Small Employers’ Relief.
From 6 April 2026, the compensation element increases from 8.5% to 9%.
The previous recovery rate of 108.5% of SMP is rising to 109% of SMP.
Which employers qualify?
An employer qualifies for Small Employers’ Relief if their total Class 1 National Insurance liability for the previous tax year was £45,000 or less.
This threshold means many small and growing businesses are able to benefit from the higher recovery rate.
Updated rules on pregnancy evidence
The same regulations also update the rules governing how pregnancy is evidenced when claiming statutory maternity payments.
Historically, the framework assumed that employees would provide the original MATB1 certificate issued by a doctor or midwife. The MATB1 confirms the expected week of childbirth and is issued by a doctor or midwife.
The updated rules recognise that maternity documentation may now be handled electronically or provided as a copy rather than only as an original paper certificate.
Copies of MATB1 certificates can now be accepted
Under the updated rules, employers may accept maternity evidence in different formats:
- A scanned copy of the MATB1 certificate.
- An electronic version sent by the employee.
- A digital copy generated through NHS systems.
The key requirement remains that the documentation confirms the expected week of childbirth and has been issued by a doctor or registered midwife.
Practical impact for employers
Employers may wish to review payroll and HR procedures to ensure they reflect the updated rules.
Confirm payroll systems apply the new recovery rate
From 6 April 2026, payroll systems should apply the updated 109% recovery rate when calculating Small Employers’ Relief for Statutory Maternity Pay.
Most payroll software will update automatically at the start of the tax year, but employers may wish to confirm the change has been implemented correctly.
Update maternity documentation procedures
Employers should ensure that HR and payroll teams accept maternity evidence in digital or copied formats where appropriate.
This helps avoid delays where employees provide maternity documentation electronically rather than in paper form.
Review internal policy wording
Some internal policies still refer to the “original MATB1 certificate”. Employers may wish to update policy wording so that copies or electronic versions can be accepted.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services Limited - a Marketing & Content Agency for the Professional Services Sector.
