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Maternity pay

Confused about if and what can be claimed

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My husband and I are thinking of starting a family. I am the director and sole employee of a limited company which is fairly new. I only pay myself £663 per month, pay no NI contributions and take no dividends. As I am the sole worker the business would be put on hold while I am on maternity leave and without anyone else there it would take no money. I was told to look into maternity allowance but I’m not sure if I’d be eligible and my accountant is on annual leave so I thought I’d ask here. What would be my best course of action? I’ve read a few things on the government website but I’ve found it all very confusing to be perfectly honest. Am I paying myself too little or too much to claim maternity allowance. As the business isn’t making a profit and not pay9ng NI I’m assuming it wouldn’t be able to cover SMP for me .

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By Mr_awol
19th Mar 2018 13:18

Speak to your accountant who might suggest a c£2k bonus during your qualifying week.

You say you're thinking of starting a family, which suggests you're not even up the duff yet, in which case there should be plenty of time to wait until your accountant gets back from annual leave.

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Replying to Mr_awol:
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By lionofludesch
19th Mar 2018 14:54

Mr_awol wrote:

Speak to your accountant who might suggest a c£2k bonus during your qualifying week.

He might - and yet HMRC specifically say that bonuses should be excluded when calculating entitlement.

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Replying to lionofludesch:
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By Mr_awol
19th Mar 2018 16:12

lionofludesch wrote:

He might - and yet HMRC specifically say that bonuses should be excluded when calculating entitlement.

They might specifically say that but if they do (I cant find any record of it, although I admit I haven't looked too hard) they would be specifically wrong in making such a sweeping statement.

There are some cases where a bonus or fees might be excluded, particularly if the company has not adopted (or was not incorporated under) the 'new' model articles, but that is why the OP needs to speak to their adviser - after the advisors holiday of course, and probably after (although not immediately after) the act of conception.

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Replying to Mr_awol:
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By lionofludesch
19th Mar 2018 16:58

Well, I'll have a look for it again. I saw it a couple of months ago in connection with a client who has already taken that extra step towards collecting SMP.

Fully aware that HMRC are not averse to making stuff up so I would be obliged to anyone who could point towards the legal backing for such a assertion.

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Replying to lionofludesch:
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By Mr_awol
20th Mar 2018 08:36

The legal backing is in the statutory maternity pay (general) regulations 1986 which basically say, all NICable earnings must be included unless excepted by virtue of Ss 25,27 or 123 of Social Security Contributions regs 2001 (or Schedule three, which is a duplication because the whole point of s25 is to bring in Schedule 3).

Anyway, since s27 deals with instances where the e'ee has to refund the company for any payment received, and s123 relates to mariners, we are left with http://www.legislation.gov.uk/uksi/2001/1004/schedule/3/made

Or if you want to shortcut the boring legislation bit you can go to HMRC guidance:

"Sick pay, overtime, bonus payments, arrears of pay and even, in most circumstances, holiday pay, must all be included if you actually get them at this time. It is when you get the money that counts, not when it was earned."
https://www.gov.uk/government/publications/maternity-benefits-technical-...

Or the SMP manual https://www.gov.uk/hmrc-internal-manuals/statutory-payments-manual/spm17...

There should be very few occasions where a bonus wont count as AWE (or cant be made to count).

The only difficult bit is trying to ensure that they done blow the SMP/SMA allowance by going over their KIT days

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Replying to Mr_awol:
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By lionofludesch
20th Mar 2018 09:01

Mr_awol wrote:

The only difficult bit is trying to ensure that they done blow the SMP/SMA allowance by going over their KIT days

I'm reminded of a reserve grade rugby match where the coach asked me how many substitutions he could make.

"As many as you like," I said. "No-one's counting them."

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Replying to lionofludesch:
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By Mr_awol
20th Mar 2018 10:05

That's fine for many (even most) companies. Ive seen some real stupidity when it comes to travel expenses for people who were apparently 'on maternity' at the time. Worst of all, whilst 'baby brain' has been scientifically dismissed as a myth, some women still seem to consider that it should be some sort of get out of jail free card.

Perhaps more importantly, nobody counts SPP days, and it is a lot easier to 'manage/influence' when work is carried out in order to ensure that new fathers get a £300 kitty to help wet the baby's head (oops, I mean 'paid' time off work, of course - like £140 a week is going to influence anyone's decision over whether to take time off or not). Unfortunately we do tend to get more caught up in advising on SMP and tend to ignore SPP.

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Oaklea
By Chris.Mann
19th Mar 2018 13:23

If you find that you aren't eligible for statutory maternity pay, you may be eligible for statutory maternity allowance
https://www.gov.uk/maternity-allowance/eligibility
As you say, it can be/is confusing and, as you already have an accountant who, presumably, is more au fait with your circumstances, it would seem to be a good idea to wait for his/her return from holiday.

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By Silver2018
19th Mar 2018 13:28

Thank you both! I know it’s easier than o wait and speak to my accountant, I was gett8ng ahead of myself. We are trying so not really thinking, I worded it poorly. But either way I’ve got a good amount of time (I think) to sort this. I just wanted to get a slightly firmer grasp on what I was asking my accountant so I didn’t look completely stupid and clueless, something I always seem to be around this sort of thing! I’ll speak to her when she’s back in April though. Thank you for your replies.

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Replying to Silver2018:
Oaklea
By Chris.Mann
19th Mar 2018 13:46

I can do; stupid and clueless, on a scale, which you could only imagine!
Your accountant really is the best person to; research and advise you, with the knowledge of your particular circumstances.

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By Matrix
19th Mar 2018 13:28

The SMP is recoverable and the company can apply for upfront funding. If you use one of the calculators then you can see how much you would get under your current salary plus any additional amount if you increased your salary during the qualifying period as advised above.

Please note that SMP would stop as soon as you go back to work apart from your keeping in touch days.

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By Paul.Chillman
19th Mar 2018 14:51

I often wonder whether we should be covering family planning guidance in our terms of engagement. The same probably applies to marriage guidance as well.

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Replying to Paul.Chillman:
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By Mr_awol
19th Mar 2018 16:52

Paul.Chillman wrote:

I often wonder whether we should be covering family planning guidance in our terms of engagement. The same probably applies to marriage guidance as well.

Maybe we should - in which case maybe we should tell the OP that having your own kids is a mug's game. Fostering is where it's at.

For two kids you could get more than £60k p.a. (as a couple) tax free. Plus no stretch marks and you get to feel all warm and fuzzy for doing a good thing.

As an added bonus, you can send them back if they're naughty (I'm kidding - don't do that. Well, if they set fire to the carpet maybe its ok)

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By Babs Harris
20th Mar 2018 13:33

In a similar vain here can anyone say if you are allowed to keep doing basic admin (emails, tax returns etc) whilst on Maternity Allowance? A business put on hold for 26 or more weeks can quickly disappear!

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