Anyone Else Have Their Own Limited Company - Confused About Maternity Pay

[MintGreenLife]

I'm self-employed, but I am set up as a limited company and so am technically employed by my own company. I'm so confused about if I'm entitled to any maternity support from the government. Initially I thought I could claim maternity allowance from the government, but my accountant seems to think I would need to go for SMP instead. In my case, does that mean my own company paying my maternity pay? If that's the case I can't afford to do that, so I'm not really sure what my options are.

I'm due August 1st with my first baby, so got a while to figure it out. Hoping someone else knows how this all works!

Im in the same boat - from my understanding you can apply for funds to be paid up front rather than having to pay from company and be refunded by hmrc. This article certainly makes it sound like that too!

www.companybug.com/maternity-pay-as-a-limited-company-director/

I'm self-employed, but I am set up as a limited company and so am technically employed by my own company.

Okay. So actually you are not self employed - that has particular legal meaning. You are employed as a company director. Therefore you should receive SMP (provided you qualify) from your company and claim it back from Govt. if you don’t qualify for SMP due to earnings or NI your company will have to tell you that and you’ll have to claim MA.

Yes. Assuming that your company is entitled to claim Small Employers relief and your salary (excluding any dividends) is high enough to qualify your company can claim 103% of your maternity pay. You should be able to apply for advance payments.

Me! I’m starting my mat leave next week so have just been through all of this (via my accountant). I’m getting SMP, which the company can receive up front in one lump sum from the gov. My accountant is then just going to put it through on payroll as normal every month and I’ll pay myself the SMP for that period from that lump sum.
Hope that helps!

@TitsOot4Xmas Thanks for your reply. Of course I do understand that, that’s why I said ‘technically’ employed by my own company, there’s no other way of really describing it.

@Smallgriff thanks for the link, will take a look ☺️ What I’ve been worrying about is if I would have to pay this back, as kind of makes it pointless if that’s the case!

@Comefromaway thanks for your reply. Ok I think that makes sense. As above, I’m a bit worried about whether I would have to pay back any support I get from the government, but sounds like maybe not?

@SkyBlue20 ohh interesting! So you also have your own limited company, rather than being self employed? I guess I just need to look into which option will provide the most support. Find these sorts of things so complex 🤦🏻‍♀️

@TitsOot4Xmas Thanks for your reply. Of course I do understand that, that’s why I said ‘technically’ employed by my own company, there’s no other way of really describing it.

You’re not technically employed though. You’re just employed. Starting the sentence “I’m self employed” in your circumstances is absolutely incorrect and could get you incorrect advice.

Legally you are employed. You’re not in any way self employed.

[quote MintGreenLife]@SkyBlue20 ohh interesting! So you also have your own limited company, rather than being self employed? I guess I just need to look into which option will provide the most support. Find these sorts of things so complex 🤦🏻‍♀️[/quote]
The most support will be as described. 103% of SMP, provided you’ve earned (in PAYE salary) the required amount.

MA won’t include 90% for the first 6 weeks for you, nor the 3% uplift of the SMP.

I’m a HR professional with a limited company.

[quote MintGreenLife]@SkyBlue20 ohh interesting! So you also have your own limited company, rather than being self employed? I guess I just need to look into which option will provide the most support. Find these sorts of things so complex 🤦🏻‍♀️[/quote]
Yep, Director of my own Limited company. Accountant said SMP was the way forward. Obviously need to have earnt enough but assuming you pay yourself a PAYE and dividend mix and you pay the max you can in PAYE before tax kicks in (approx, £1,000ish I think it is) then you’ll be absolutely fine.

Who does your payroll? If it's an external firm, I think they should be able to answer all your questions. The company can pay you according to company policy / whatever you decide, and you can claim SMP back from HMRC. Normally it would be set against your PAYE, but not sure how it works if its your only employee. Ask your payroll people!

@SkyBlue20 brilliant thanks. Yep I pay myself the maximum salary for the tax allowance and then dividends, and yes pay PAYE, so that sounds like it should be fine then ☺️

@RosettaR I have spoken to the company that run my payroll and they thought SMP was my best option but couldn’t really give me much advice beyond that. I’ll try and do a bit more digging