Maternity Allowance for the self-employed - wise words please!(16 Posts)
Hello everyone, I have just joined and thought maybe this would be a good place for advice..... I am expecting my first baby in November which is very exciting.
I am a freelance filmmaker, artist and craftsperson on a pretty low income. I make a sell quite a lot of work and have an online shop on at Etsy.com where I sell stuff. I don't earn very much from my online shop but after my baby is born and I am thinking about starting work again, this will be really convenient as I can do it at home in my own hours. Anyway, I know I am not allowed to work during my Maternity Allowance claim period but it would be ludicrous to 'close' my online shop during this period as it would be so much harder and slower to get sales and/or people looking at my work once I am ready to work again. I hope all that makes sense. I am totally planning to stop making new stuff while I am mummying for the first few months, but I want to be able to keep the things that are already made up in my online shop for people to see and buy if they wish.
Does anyone have any wise words on this subject? Being self employed can often make things complicated. My husband is also self employed and neither of us have a normal monthly salary or anything like that so we will be scraping by a bit. I hate the thought of shooting myself in the foot by totally removing any work I have for sale in my online shop. By the way the things I sell are generally priced between £15 and £50 so I am not talking huge amounts here.
If anyone has been in a similar situation I would love to hear from you....thanks! x
not sure, how things are when you sell stuff, sorry.
have a look at the link and find the bit where they talk about KIT days while you are on MA. maybe it will be helpfull?
It's a shame you aren't eligible for smp. There is a loophole whereby you can work as much self employed work as you want whilst claiming SMP. Failing that it would have to be your 10kit days but you could keep records of time taken to make things and then total for the 9hours on a day you sell summat? Sounds tricky though.
Yes it's tricky - thank you for your comments. I guess I'll have to use that rule about KIT days....maybe deal with any sales or queries one day each week which means potentially ten weeks in total where I can keep it running...better than nothing I suppose!
I'd be really interested to see what you find out re: this, as I'm in a similar position, though not due 'til March.
I wonder how they define 'work'? If you physically make all the stock to sell before your MA time, then simply selling them while you receive the allowance may not count, or be considered within a reasonable work limit?
If you stocked in a shop (rather than Etsy) would this be different? Because the shop would be selling (i.e. working) on your behalf once you had made the stock...?
Or if you made lots of stock during your MA period but didn't start selling it until you had signed off, maybe that's worth considering - there would be no invoices going backwards & forwards, or money in and out of your account- if that's a possibility financially?
I too am now self employed (had LOVELY first maternity leave when employed, earning SMP plus half my salary for full 9 months... why did I give it up?!!!).
Anyhow, for my 2nd preg, I claimed MA. Lots of forms to fill in, but so long as you've been paying Class 2 national insurance contributions for a specific amount of time pre pregnancy(which I'm sure you will have done if you're self employed & complete a self assessment tax return each yr), then you are entitled to MA at £120 (or so) per wk. Fill out the forms plenty in advance - they seem to take forever to process them in my area.
The 10 KIT days are slightly annoying - even if you only work 1 hour on 1 day, that counts as a full KIT day being used up. I have to admit, I feel that is quite unfair (why don't they just say 10 KIT days OR the equivalent of eg 70 hours in total, assuming you do 7 hours each day). If you're feeling slightly cheeky (& I didnt say this!), you could prob do 2 half days one week and just call it one KIT day in total, rather than the 2 you're meant to count them as. I always keep a log of my KIT days as when you write to say you're finishing mat leave, they want you to detail your KIT days.
I plan on working one day every other week, & claiming MA from the day I give birth (I.e. no maternity leave before hand which, realistically, I prob will work right up to birth, but then I do only work 3 mornings per wk, so not too heavy). Therefore I should be able to have up to 20 wks being paid MA, which will defo help.
HTH (albeit slightly waffly!).
ps hope the above doesn't sound like I am suggesting you to be some sort of benefits cheat (the bit about doing 2 half KIT days & recording them as 1 in total)!! But sometimes when you're self employed, you need to spread work over 2 half days rather than 1 full day & the rules seem so inflexible with this even though it all adds up to exactly the same hours
thank you everyone - yes it's tricky and yes hopefully I can use those 10 KIT days very well spread out over a number of weeks....if I needed to send out something that had been bought from my shop it wouldn't take longer than an hour or so at a time as I would have all the stock sitting there already made...and in theory my husband could do all of that so I would be doing hardly any 'work' at all. I have indeed been paying my NI for several years so I know I am entitled to the MA but don't really want to jeopardise that if i spend an hour a week keeping up to date with my online shop. I will keep researching....maybe Citizen's advice could help?! x
Sorry to hijack the thread but I have a Q about MA too. I registered as self employed in May and found out I'm pregnant 2 weeks later. My business is only just getting off the ground and I'm not earning enough to pay NA (monthly this is the same as I am earning monthly) but I was working full-time and paying NA every month up to this. Would I be able to claim MA in February (dd) or shall I rule this out?
mummymccar yes you can defo claim MA - they assess your entitlement to MA based on either your contribution to class 2 National Insurance contributions for a certain amount of time or whether you have worked full time recently (during your 'test period')...
All sounds abit complicated, but essentially if you were employed for at least 26wks during the 66 week period leading up to the date that your baby is due, you should be entitled to MA.
To illustrate, I left my employment on 1st June 2007. I immediately became self employed and starting paying Class 2 National insurance. My baby was due February 2008. The 66 weeks leading up to my babies due date went all the back to October 2006. I chose my test period (which is the 26wk period mentioned above) to be within the October 2006 to May 2007 period i.e. the time when I was employed by somebody, so I qualified for MA on the grounds that I HAD been employed within the required 'test period' (rather than the fact I was now self employed). I just had to fill out on the forms how much salary I earnt from my employer during the 26wk test period(you chose this period) & how much tax I paid, plus provide payslips to support this.
This time round, however, I will claim MA on the grounds that I have been self employed & been paying class 2 NIC since June 2007.
Sorry if it sounds confusing(!!), but based on your description & dates above your situation sounds very similar to me when I gave up employed work to become self employed, and I qualified for MA no probs.
Thank you so much icravecheese - the illustration helped a lot, the months involved are actually exactly the same as me, just a different year. Looks like I should qualify then! Fantastic! Thank you for the advice. One more question, when should I apply?
What is the first point of call to get the forms for MA?
Peeling - I checked last night and you can download them off the MA section of the HMRC website. You can phone to get them but the phone us rarely ever picked up when I try. You fill them in from the 25th week of pregnancy.
mummymccar - sorry for delay in reply to your Q, I was going to say to you that I applied the earliest that I could... but think you've already found out that you can apply from 25wks. Worth applying as soon as you turn 25wks, as sometimes they can take ages to process, and once they've written you a letter saying you are entitled to MA, all you need to do is notify them when you intend to start mat leave. Happy form filling! (there are PAGES!!)
Please tell us if you find anything out about this as I'm in a similar situation. I can pare my business right down to the bare bones, but I can't stop it altogether as I'm working with a two year lead-in time and there's things I have to do for it every single day without fail!
Thank you icravecheese!
I write a weekly column and can't pause it, so I think maybe I'll have to write enough to cover maternity leave and work out some way of delaying the payment maybe. This tax stuff is complicated! So pleased to find out I should be able to claim though - was picturing trying to work and find clients during breaks between feeding/changing!
Good luck everyone, hope HMRC are nice to you all!
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