Company Director is having a baby in June. She currently earns £719 per month from the small Limited Company she and her husband run. No other employees.
If the company continue to pay her the £719 per month how much SMP will the government re-imburse and is there a maximum number of months that can be claimed for.
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Replies (6)
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Consider a pay increase.
Does she know that she can't work, apart from a few KIT days, if she's going to claim ? The Government aren't paying her to have a baby. They're paying her to stay at home.
The company can pay her above her SMP. Amounts paid do not affect the SMP since it is based on historic earnings during certain weeks of pregnancy. Since SMP is taxable, whether it is tax efficient to extract profits during the maternity leave is a different matter. She cannot work other than KIT days as Lion says.
(I play around with my payroll software to get an answer to this.)
The company can pay her above her SMP. Amounts paid do not affect the SMP since it is based on historic earnings during certain weeks of pregnancy. Since SMP is taxable, whether it is tax efficient to extract profits during the maternity leave is a different matter. She cannot work other than KIT days as Lion says.
(I play around with my payroll software to get an answer to this.)
I agree with all this but the point I was making is that increasing her salary now will (probably) increase her SMP - and the 103% Government subsidy. Which is free money.