SMP Reclaimed

This records Statutory Maternity Pay reclaimed back from HMRC, reducing the overall cost of wages. It normally carries a credit balance — the opposite of a typical overheads account.

Real-world examples

Small employer — Small Employers' Relief

A small nursery or care business with a total employer Class 1 NI liability below the qualifying threshold in the previous tax year can reclaim more than 100% of Statutory Maternity Pay paid out, the extra percentage compensating a small employer for the administrative burden of running the scheme. A £2,400 SMP payment reclaimed under Small Employers' Relief sees slightly more than £2,400 credited back to 7011 (SMP Reclaimed), with the difference debited to 1200 (Bank Current Account) once HMRC pays it across — no VAT is involved.

Larger employer — standard rate

A larger employer above the Small Employers' Relief threshold reclaims SMP at the standard rate rather than the enhanced small-employer rate, so a like-for-like £2,400 SMP payment brings back less than the full amount — the shortfall is a genuine net cost rather than something fully offset. How much this code gets used also tracks workforce demographics more than sector as such: businesses with a predominantly female workforce, such as childcare, education and care providers, tend to use it far more often than those in trades where women remain a small minority of the workforce, such as construction.

Commonly confused with

Because code 7010 (SSP Reclaimed) sits right next to this one in Overheads, it's a common mis-posting target. Code 7011 is specifically for smp reclaimed, while 7010 covers ssp reclaimed — similar in nature, but keeping them separate is what makes the overheads section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

An error posting to SMP Reclaimed won't change total overhead spend, but it will distort the overheads breakdown that's usually reviewed line by line each month to spot cost creep.

Other codes in Overheads