SMP Entitlement

SMP Entitlement

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Director and sole employee of own company is pregnant. Is she entitled to SMP?.

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Euan's picture
By Euan MacLennan
31st Jan 2012 13:31

In theory, Yes

... provided that:

she was not already pregnant when she started the company, andshe has been paid above the NI Lower Earnings Limit (£5,304 in 2011/12), andshe is actually taking maternity leave, which means that she is doing no work for the company so it will be completely inactive while she is being paid SMP.

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By aiwalters
31st Jan 2012 15:16

completely inactive?

I disagree with point number 3.

Generally a  director/employee of a OMB has two roles; one of employee, and one of director. Whilst both director's fees and employment income are subject to tax and NI, there are several differences between them, eg, no NMW on director's remuneration. Only if there is an employment contract is NMW relevant.

There is nothing wrong with the director having two separate roles with the company. By taking maternity leave on one, she is not stopped from working for the other one (as long as she started before the relevant week). She can then employ a third party to do the "employment" side of things whilst she takes maternity leave, and she can still run the business as an office holder.

Technically, by doing this she'd be getting double SMP for the time when she is neither working nor serving as an office holder.

Plus, she can work for 10 days (KIT days) without losing SMP.

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