Business changes that affect payment of Statutory Neonatal Care Pay
Source: gov.uk (2025-06-17)

What happens if you’re an employer and you take over a business, stop trading, become insolvent or make an employee redundant.

Take over a business

When you take over a business, continuous employment may apply under the Transfer of Undertakings (Protection of employment) Regulations (TUPE Regulations) 2006 (https://www.legislation.gov.uk/uksi/2006/246/contents).

These regulations apply when you take over one of the following:
- all or part of an existing business, and the contract of employment will transfer over to you
- a service provision (such as a cleaning contract)
The previous employer must give you the ‘employee liability information’. It gives information about the employee being transferred with the business.

If the TUPE Regulations 2006 do not apply, continuous employment may still not be broken in the following circumstances.
- A teacher in a school maintained by a local education authority, moves to another school maintained by the same authority. It includes maintained schools where school governors, instead of the local education authority are the teacher’s employer.
- One corporate body takes over from another as the employer by, or under an Act of Parliament.
- The employer dies and their personal representative or trustees keep the employee on.
- There is a change in partners, personal representatives or trustees.
- The employee moves from one employer to another, and at the time of the move, the 2 employers are associated.
If continuous employment is not broken, your new employee may get Statutory Neonatal Care Pay as long as they work for you, and they worked for the previous employer during the 26 weeks up to the end of the relevant week.

If you take over a business and continuous employment is broken:
- after the baby starts to receive neonatal care — the previous employer must pay Statutory Neonatal Care Pay to your new employee
- before the baby starts to receive neonatal care — your new employee cannot get Statutory Neonatal Care Pay from the previous employer, or from you
Check if your new employee will be eligible for Statutory Neonatal Care Pay (https://www.gov.uk/employers-neonatal-care-pay-leave) after they’ve continuously worked for you for at least 26 weeks up to the end of relevant week.

Find out more about business transfers, takeovers and TUPE (https://www.gov.uk/transfers-takeovers).

Stop trading

If you stop trading, you must carry on paying any outstanding Statutory Neonatal Care Pay, until one of the following applies:
- your employee receives their full entitlement
- their entitlement ends for some other reason
Become insolvent

You must tell HMRC if your business becomes insolvent during the Statutory Neonatal Care Pay period.

The Statutory Neonatal Care Pay period is each week that your employee is on Statutory Neonatal Care Leave (up to a maximum of 12 weeks).

An administrator, liquidator or someone acting on your behalf (such as an insolvency practitioner) can tell us if your business becomes insolvent.

HMRC will pay the employee:
- the Statutory Neonatal Care Pay due to them
- what they’re due as soon as possible
The employee can contact the HMRC Statutory Payment Dispute Team (https://www.gov.uk/government/organisations/hm-revenue-customs/contact/statutory-payment-dispute-team) to find out what happens to their Statutory Neonatal Care Pay.

Find out more about liquidating a company (https://www.gov.uk/liquidate-your-company).

Make an employee redundant

If you make an employee redundant, and the eligibility criteria for Statutory Neonatal Care Pay has already been met, you must carry on paying any outstanding Statutory Neonatal Care Pay.

Find out more about making staff redundant (https://www.gov.uk/staff-redundant).