Just got my first bit of maternity pay along with my last bit of salary. I had no idea that I'd be taxed on my maternity pay. That's really rubbish isn't it?! I'm self-employed as well as working part time but I won't be working again until at least next Feb, in which case I'm not expecting that I'll even earn my personal allowance during the next tax year. How pants I'll have to wait until next year to get the money back again - we need it now!
It is rubbish! Is it a standard amount of tax for everyone? If so ... would you mind sharing how much they take off you? If it's on an individual basis totally understand if you want to keep if to yourself!
Well as it's a mixed pay slip for this first one then hard to tell exactly how much they've taken off the SMP part, but it's definately the whole amount that was taxed. So total amount was £570 and took off £114. SMP part of earnings was £258.
Yeah I think I'll be able to claim it back thanks, trixy, only it'll be another year before I can, and it is the next few months that I need it. Just a rubbish system really. They give you money, then take some away and then you ask to get it back again! I just didn't realise they taxed smp at all.
I think unfortunately it's because my PAYE work is classed as my 'second' job and is just a Basic Rate code, thinking about it. So my personal allowance is set against my self-employed income but I'm not expecting to earn anything on freelance basis this tax year (till next April). Wonder if it's worth ringing tax office? Although last time I had to, cost me £6 in phone calls. Can't win!
If you earn anything including SMP above the tax free limits then it will be taxed. If SMP is your only income in the tax year then your income will be below the tax paying threshold and won't be taxed.
I'd ring HMRC. I have two jobs and they split my allowance between them based on how much I think each one gives me. They may be able to do this for you. I also noticed (I actually run my own PAYE for one job) that it adjusts tax throughout the year if there's a change in code. Worth a try?
Fluter thanks for the suggestion. Yes, think that might be worth a go. Didn't know they could split it. I don't expect I'll earn anything much from self-employment this tax year so perhaps they can swap it for this year.
Thanks prolificwillybreeder i'd forgotton about that site. I hadn't realised how expensive even the 'local' 0845 calls are during the daytime.
Because your SMP is on your second employment, anything you are paid through it is going to be taxed, and I doubt you can claim it back. However did you know if you have two jobs and earn enough in both you can claim SMP on both? In your case OP you maybe able to claim Maternity Allowance through your self employment, which if paid through your normal tax allowances you might not pay tax on. I would go on to the DWP website, as you can backdated claims upto 3 months.
For everyone else I wouldn't worry too much about paying tax on your SMP. If you are paid through PAYE and your tax code is correct you shouldn't pay much/if any. The earnings threshold per month if your on 747L is £622.92. If you've earned less than that the difference is carried over until the next month.