Self employed & Mat leave

[Moroccanqueen]

This isn’t an AIBU but shamelessly posting for traffic.

can someone explain to me how maternity pay/allowance or whatever it is, is navigated when your self employed?

my company has been open for 12 months but I only went full time in December. It makes a good income, small but steady and covers its own expenses although I can’t take a pay from it yet. Just odd bits here and there as I have reinvested a lot for stock etc (beauty salon).

i won’t be able to stay out of work for long as I will lose clients but will probably return for 1 day a week at the beginning unless by some miracle I am able to employ a staff member later down the line to take over my clients. I am only 8 weeks pregnant but trying to understand what to do.

should I try and put away abit each month to then use to pay myself when on Mat leave?
(the way the business is growing I would expect the income to increase a fair bit)

curious as to what other people have done?

I would put away as much as you can afford to do regardless. If you are planning to not take long off, will you have appropriate childcare in place, as you may need to register with places already.

It's based on you having paid your NI contributions and is a set amount each week (you'll have to Google Mat allowance as I don't know it off hand)

You will get statutory for 39 weeks as long as you've been registered with HMRC for at least 26 weeks, and paid at least 13 weeks of class 2 national insurance. You will get £172.48 or 90% of your average weekly earnings (whichever is lower). If you've not paid class 2 national insurance it will be £27 per week.

Once you go back to work, even for 1 day a week, your maternity leave stops and you won't be able to claim any more. Something worth thinking about if maternity leave pay is more than you would get working 1 day

Are you a sole trader, or do you have a limited company?

If you have a limited company, have your set yourself up as an employee?

Ltd company - and no how do I do this? As in set me up on payroll? Sorry this is all so new! ☺️ on school run so will reply to the rest of you this eve but thanks all for the advice!

I recommend you get proper professional advice.

Are you paying yourself purely dividends? You should have payroll set up, even if you are only paying yourself an amount below the tax threshold, in order to qualify for things like statutory maternity and sickness pay and retirement pension.

Technically to qualify for statutory maternity pay (which would be part or maybe fully funded by HMRC) you need to be employed before you are pregnant. Whether they can backdate your employment so that you qualify, I'm not sure.

Get an accountant to help.

The strong likelihood is that as a self employed person you will not be entitled to maternity benefit , just as you are not entitled to sickness benefit and many other benefits.
For this reason you need to take out sickness policy etc out. Because as self employed there are many benefits you are not entitled to.
As to maternity you will have to save up to pay yourself for any time you have off . For this reason I worked to the last minute and went back to work at 5 weeks after birth and 8 weeks after birth.
You may be entitled to maternity allowance https://www.freeagent.com/guides/small-business/maternity-pay-leave-self-employed-mothers/

Op has a limited company, so should technically be an employee of the company, which would give entitlement to statutory sick pay and statutory maternity pay.

Op has not been paid by the company and does not appear to be on a pay roll. I would suspect , perhaps , the intention is to be paid by dividends . If they are not paid , they probably are not paying NI etc therefore they will not meet the criteria for being an employee.

If it is a proper limited company, you are not self-employed. You are (presumably) a director and an employee of the company. You will also need to submit proper audited accounts, so I would ask your accountant about setting up the payroll and any potential maternity payments. Running a limited company is a serious matter, so you need to ensure that you pay for proper, professional advice and that all is above board with HMRC.

Which is exactly why I suggested getting professional advice, to see if it's possible to backdate being on the payroll.

Considering we've had "real time" reporting for payroll for many years now, I can't see how "backdating" payroll can be achieved without it being fraud, especially if no "wages" have actually been physically paid, and even if payroll was set up to report ad-hoc payments to the OP, there'd almost certainly be fines/penalties for late submission.

You are right, it's probably too late. Penalties aren't usually paid for one late payroll return in a financial year, but given that the pregnancy started in the last financial year, it's highly unlikely to be doable.

Op, what you might need to do is voluntarily pay ni contributions, in order to qualify for maternity benefit.

But I still strongly urge you to get professional advice on how you are operating the financial side of your limited company going forward.