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Any self-employed/freelancers that understand SMP?

(16 Posts)
StuckOnTopOfTheChristmasTree Wed 05-Dec-12 14:00:54

I am trying to understand the maternity rules and not too sure of whether I am self-employed - which would allow me to claim maternity allowance, or am I employed - which allows me to claim SMP.

I am the sole director of my limited company, which pays me a small wage each month, plus some dividends. That sounds like an employee - but i am the only employee of the company of which I am the only director - which then sounds like self-employed.

Anyone else been in this position?

mysterymeg Wed 05-Dec-12 17:17:00

Do you have an accountant/tax-advisor? They should be able to give you a definitive answer in a few minutes.

However it is my understanding that as director = employee you would qualify for smp. Be careful though as you have to earn at least £107 pw to qualify for smp so depending on the wage you are payingyourself you may have to claim maternity allowance anyway.

flowerytaleofNewYork Wed 05-Dec-12 17:21:54

The fact that you are the only employee/director doesn't mean you are not an employee.

I own my own limited company and am the only employee, and like you, pay myself a small monthly salary and dividends separately.

I claimed SMP, and got it paid upfront by HMRC as well, which was great.

Your accountant/whoever does your payroll ought to be able to sort it all out for you.

efme Wed 05-Dec-12 21:50:53

If you pay yourself through PAYE then you can get SMP and HMRC will reimburse you £104%, to cover Employer's NIC as well.

efme Wed 05-Dec-12 21:51:28

I'm sure you've seen this, but it's useful:

galwaygirl Wed 05-Dec-12 21:56:58

I am the same in the same position as you and got SMP, my limited company paid it to me and get refunded by HMRC

ChablisLover Wed 05-Dec-12 22:00:19

If you get a salary and it qualifies for smp you must claim it from that employer be it a third party or your own company.

You cannot make a choice between claiming maternity allowance and smp - if you can claim smp you must claim it first.

Also, smp is taxable and as such will be included in your p60 for the year and will be included in your tax return.

The jobs centre is very good at answering questions in this area. Also, ask your payroll provider as they will know definitively if you qualify for smp

butterflyexperience Thu 06-Dec-12 03:49:56

Thank you for this thread.
I have been wondering how it all works too!
Still am confused though...

Emsyboo Thu 06-Dec-12 05:34:47

As long as you are paying your self through the books (PAYE) and your minimum salary is over the threshold for NI you ate entitled to SMP.
I am a director of a limited company but when I was pregnant with first DC we found out I had a dodgy accountant who hadn't done things through the books do had to claim as self employed.
This time we are all sorted and I am entitled to SMP and the company gets 3% as a small business relief.
You should talk to your accountant I remember the forms being a nightmare with baby brain but you should be entitled to SMP they are similar amounts but good to get that extra 3% good luck x

StuckOnTopOfTheChristmasTree Thu 06-Dec-12 06:19:27

Thanks I had hoped it was smp as its a little higher and good to know its got some other benefits.
Only been doing this for just over a year so all still a bit new to understanding how it works!

EmNewMum Sun 09-Dec-12 18:29:01

I've also been grappling with this and have just spent a few hours confusing myself on various HMRC websites. I'm now clear that as the sole director of my Ltd Co I pay myself SMP and HMRC NI on that amount.

However, given that no cash will come into the business while I am on maternity leave it does cause a bit of a cashflow issue. Is there a mechanism to claim upfront from HMRC does anyone know? And if so are they are any qualifying conditions?

rainrainandmorerain Sun 09-Dec-12 19:41:40

V glad to see this thread - I'm in exactly the same position, just working it all out.

I've been advised that I have to claim smp, and that I can get hmrc to pay it in advance (I would also face cash flow problems I think) - I have to talk to them in more detail this week, so if i get any tips which are of general use, I will report back.

EmNewMum Sun 09-Dec-12 20:01:11

That would be brilliant to hear back rainrainandmorerain... I'll also post here on things I find out this week.

freerangelady Sun 09-Dec-12 20:13:56

Give hmrc a ring. There is a mechanism for them to pay your company your smp upfront but the form to get it is hidden in the depths of the net. Even the chap I spoke to took ages to find it. He said to fill it in and send it back 6 weeks or so before you want to claim.

rainrainandmorerain Thu 13-Dec-12 22:39:53

Well, I said I would report back - although I don't know if I have anything useful to add, sorry. chablislover seems to be on top of it all!

As I have been working as the sole employee of my ltd company for over 26 weeks and my pay is over £107 a week, I have to claim smp not maternity allowance. As my NI payments are under 45 grand a year, my company can claim back 103% of the smp (I have no idea why), and my tax advisor sees no reason why I can't do this in advance.

luckily my accountant will sort out the payroll and my p60 at the end of the year, so atm it is just the advance claim form I need to get my head around.

It seems to be the usual freelancers' deal - potentially we get more money than we would as self employed on ma, but there is a mighty pile of admin to get through first...

ChasingSquirrels Thu 13-Dec-12 22:47:29

I really would advise that you talk to your accountant about this.

Depending on the availability of funds within your business it may be worth your while paying yourself a bonus in the relevant weeks on which the SMP calculations are based - thereby boosting your SMP from the basic amount to 90% of the amount in the relevant period.

Both the bonus and the SMP would be subject to PAYE and NI, but HMRC will reimburse the company 103% (or 104%?) of the SMP payable which depending on how much you put through as a bonus could amount to a significant sum.

If you are paying dividends anyway then you could switch those over to a bonus for the relevant weeks. But you do have to make sure that you properly propose and pay the bonus in the relevant period.

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