Maternity pay impacts for self employed women

[crankysaurus]

I've not read round this any further and am not directly impacted by it but thought I'd share. Sounds rather worrying...

www.contractorcalculator.co.uk/maternity_rights_stripped_self_employed_women_557510_news.aspx?fbclid=IwAR3UGkHSMOGwdv_797HHGV0MF6StJ6EZhT3rZjlo8sVlqsmU0FIHq3YC7TI

Clicky link, hopefully... www.contractorcalculator.co.uk/maternity_rights_stripped_self_employed_women_557510_news.aspx?fbclid=IwAR3UGkHSMOGwdv_797HHGV0MF6StJ6EZhT3rZjlo8sVlqsmU0FIHq3YC7TI

For those looking for more information, the keyword to search for is IR35. The justification given by HMRC is that approximately (by their estimates) £600M/p.a. is lost in tax revenue to contractors overstating operating expenses. Critically, the definition of a deemed employee is based upon a number of factors and is subject to review. One of these factors is whether the contractor receives employee benefits (including maternity pay) so it's not entirely cut and dry.

It does sound quite complex, especially the bit around employee benefits. Hopefully things will be clear for all those it affects soon, especially women due or intending to have children.

IR35 is a minefield for everyone but I agree your link makes it sound like they've completely ignored the impact on maternity leave. This is what happens when proper Equality Impact Assessments aren't done. Which I don't know, but can guess.

I would bet a pint on there not being an EIA for that!

IR35 is absolutely devastating for women, in the IT sector working as a contractor is the only way I get equal pay to my male counterparts.
As a limited company contractor I would be entitled to maternity pay as a employee for tax purposes only I can't. CRAZY

I have a friend who spent many years contracting in financial services, it's just standard practice.

I've seen very little else about this impact, not sure if it's been picked up by any MPs. Might email mine.

Maternity Action, who know their stuff, don't think this is correct. They did a blog on it:

"There has been a considerable amount of news recently implying that self-employed women will lose their Statutory Maternity Pay (SMP) from April 2020 if they are deemed to be employees for tax purposes under the IR35 reforms. This is unlikely to be the case as self-employed women have never been able to claim SMP in any event, only Maternity Allowance, and the change in tax status is more likely to mean that a woman on the payroll will now qualify for either SMP or Maternity Allowance depending on her length of service and level of earnings."

Contractors were never entitled to maternity pay in the same way employees are, whether inside or outside IR35. Like other self employed women they may be entitled to maternity allowance provided they’ve made class 2 NI contributions during a qualifying period.

The alternative is that they become an employee. This will give them all the rights of employees, sick pay, maternity pay etc however this isn’t an attractive option as (inside or outside IR35) the contractor rate is usually substantially higher than that of a permanent employee.

Contractor Uk can be a great site but it’s also massively biased as contractors didn’t want the IR35 reforms to come in. Nothing has changed, as self employed people have never had maternity rights so can’t be stripped of them.

It does look like a beat-up by Contractor UK as part of their campaigning against the IR35 reforms. I would be more convinced that they were serious about this if they had shown any interest in maternity rights before the reforms.

Thank you for the clarification!