Maternity leave while self employed - how to manage

[screwedupp]

I’m freelance with a business set up as a limited company and am expecting my first child next year.

I’m aware that I’m entitled to £145 per week maternity allowance from the government for 39 weeks, which I thought would be really helpful.

However, on closer reading I’ve discovered that during the weeks that I’m claiming this allowance, I’ll only be allowed 10 KIT (keeping in touch) days - and if I exceed this I will have to cancel my allowance.

KIT rules state that any work done in one day counts towards one of the 10 days - so if you fit in half an hour’s work one day, that equals a full day’s work.

This has scuppered my plans somewhat as I was hoping to squeeze in seven or eight hours of work a week (spread over times when the baby is napping/DH can have him or her) while on maternity leave.

Finding out I’m only allowed 10 working days throughout the whole period will mean this won’t be possible.

In light of this, is it therefore best not to bother applying for the maternity allowance at all?

If any other self employed people have been in the same boat I would love to hear your thoughts.

I’m going to claim maternity because I don’t know how realistic it will be for me to pick up any work, especially initially. I’m then going to ensure I do all my work on my KIT days, so I condense it into one day, so I can still continue to claim. But I guess it depends on whether or not you can do that.
It’s a similar rule when you’re in full time employment as well - a limited amount of KIT days.

Thanks Bella. It’s a shame there’s not more flexibility around KIT, as it’s much more realistic to do a bit of work (like replying to emails for example) here and there when you get the chance, rather than cramming it all into one day IMO!

I think you’re right though - it’s better to claim initially and then cancel if you find you’re exceeding the hours stipulated?

If you're self employed dont you just fill in a tax return at the end of the year, how will they know if you've done 1 hour a day or 7 hours in 1 day?

On the other hand I personally would have struggled to do any work at all while DD was a baby as I was either looking after her or sleeping (and she was a fairly easy baby).

If you're self employed dont you just fill in a tax return at the end of the year, how will they know if you've done 1 hour a day or 7 hours in 1 day

I’m not sure, but I imagine that if you were to be investigated, they could look at your email account and see that you’d been sending daily emails during the time you were on maternity leave for example - and then you’d be in trouble!

If you operate through a limited company you would claim statutory maternity pay not maternity allowance. Your payroll provider can deal with that.

The same rules apply to KIT days but the whole purpose of SMP/MA is that you have time off work not that you do a bit each day. I do know that is frustrating but the KIT days are there to prevent isolation and difficulty reintegrating.

Just invoice out the hours you do on one day. I took on an immediate new client towards the end of my mat leave and had only used 9 kit days. When I called to cancel my allowance the woman was encouraging me to use the last day as my first day with new client. They honestly don't care as long as you aren't invoicing 5 days (eg 37.5 hours worth) work and claiming it as only 1 day (as that could be obvious in your tax return)

Just invoice out the hours you do on one day.

@Rosetinted47 Sorry Rose, probably being thick here but how do you mean?

HMRC are totally stretched, I really can't see them investigating and looking into days worked around Maternity. Don't worry about it, Just do what you need to do and claim your MA.

HMRC are totally stretched, I really can't see them investigating

Yes very true but doesn’t make it right. in the same vein, the police are also overstretched, doesn’t mean you can go and nick something from the shop does it?!

I know the above is somewhat extreme but just because you’re not going to get caught doesn’t mean it’s ok.

Also self employed, also pregnant!

With DS1 I applied for maternity allowance, expecting to just claim for a short time, but my application was rejected.. anyway in the end I was up for working again when DS was 3 days old (I wfh and my job is very easy tbh plus it was a great job I couldn't say no to!). I also found the KIT days limiting for my type of business and it would have definitely lost me clients long term if I had stuck to it.

This time round I haven't even bothered applying (I'm 40+3 and still working now) and my plan is to just work if I can and if I can't, tell my clients I'm on 'holiday' or somesuch none of them know I'm pregnant!!

I agree though that the set up probably isn't working for a lot of self employed new mums, maybe something needs to be done!

If you operate through a ltd company you aren’t self employed. Are you not taking a salary? If you are you should be claiming SMP through the company. The 10 KIT days still apply.

And yes to just mention I am a sole trader, not a Ltd company so not sure if that's different.

@Teensruletheroost So you think the op is stealing whilst claiming MA trying to keep her business going ? Being self employed is bloody hard and means there is no one else to take the ropes, a prolonged absence could finish her business.

Yes, I take a salary through my limited company. But like you say, the KIT days still apply.

That’s the other thing - if I do take maternity allowance/pay do I have to stop paying myself through the company while I’m taking it? I’m so confused and can’t find much about it on the internet at all!

How will they know? I'm employed and worked the equivalent of 10 days during my mat leave, and didn't lose mat pay. it was an hour or so here and there whenever I could squeeze it in. About 80 hours in total. My employer didn't mind and neither did I - it just wasn't officially recorded. I don't see the harm in that.

HMRC are totally stretched, I really can't see them investigating and looking into days worked around Maternity.

That could be true User, but if they did choose to look into it, the last thing I could cope with is an HMRC investigation on my hands with a screaming baby in tow. And if they did find anything irregular presumably I could end up in jail!

Are you going to apply for SMP or MA? SMP is claimed through the company and MA is a claim the individual makes.

As long as you are only paying yourself the equivalent of 10 days salary on top of SMP then it's fine. Answering the odd email here and there can just be done as 'unpaid'.

If you're a limited company I'm pretty sure you should be applying for SMP rather than MA.

The SMP is paid by the company, but the company can then claim the money back at a rate of 103%.

@screwedupp They would not throw you in jail, at the end of the day you are keeping your business afloat, from that business HMRC will get PAYE, Self assessment tax, corporation tax and let's not forget the excessive amount of class 4 nic you pay for the privilege of being self employed.

Can you tell I'm jaded from watching HMRC go after small businesses taking everything they can get. 😞

@userxx
So you think the op is stealing whilst claiming MA trying to keep her business going ?

No I didn’t say that (although technically it could be fraudulently claiming benefits which is effectively the same thing).

My main point was something is not ok just because the likelihood of being caught is slim.

Thanks all - so it sounds like SMP is the one I need to go for. The same dilemma in my OP still applies though - whether to take it or not!

I’m so sorry to hear that @userxx - it is bloody hard isn’t it?

@screwedupp Just don't claim for random hours here and there.

I still log onto my work emails now or if somebody from work asks if they can call me, I take a call, but it's done as a gesture of goodwill rather than thinking it's a KIT day. Then when I do do a KIT day and it doesn't last the full day, I'm content in the knowledge that work have had a little extra out of me on other days which evens out in the end.

So just set say two KIT days a month.

If you were to be investigated, you say you did those bits of work on a voluntary basis to keep your mind ticking over.

No I didn’t say that (although technically it could be fraudulently claiming benefits which is effectively the same thing).

To be fair I suppose it would be benefit fraud.

I just wish the rules were more flexible so you could work ten days but an hour here and there, rather than having to do it all on 10 set days (and one hour’s work counting as a full day!)

In my position would you claim the SMP or leave it and try to get more work done?

@MrBobLobLaw can I ask why you got rejected? It hadn't even occurred to me that I might! Was it down to national insurance payments?
I've put in my claim and haven't heard back yet but now I'm wondering if I'll actually get anything