SMP: Is this a weird loophole or has the tax office made a mistake?

[Quenelle]

My colleague's just told me about this example that has arisen at his partner's work. A director of a limited company has just gone on maternity leave and the month before she went she was paid a £10k bonus. And then for her first month's SMP they have paid her 90% of the bonus month's total, so £9k and claimed it back from the tax office.

My colleague's wife phoned the tax office to check if this was correct and was told that it was. The first six weeks' SMP are based on what she was paid for the last full month before mat leave started, even if it includes an annual bonus.

If this was a loophole I'm sure I would have known about it. Surely the tax office has advised them incorrectly?

No it is correct - the SMP is based on a certain periods income. if you happen to have a bonus paid within that time then it increases the salary your SMP is based on.

I was lucky enough to benefit from this!

No that's not quite correct. SMP is calculated based on average pay during the 8 week Qualifying Period, which is weeks 17 - 25 of pregnancy. Any pay the employee receives during that time, including annual bonuses or anything, must be included in that calculation. But the last complete month before maternity leave isn't the correct time period to take.

Oh ok, thanks.

I thought there was a qualifying period longer than one month. Very nice if you can time it right. I would never have benefited anyway, there haven't been any bonuses handed out around here for a few years