Setting up a self-employed business on maternity leave

[marchpoppy]

I am in need of advice if anyone can help?

I am employed (by a charity) and currently on maternity leave. I am receiving SMP (and financially dependent upon it). It is clear on Direct.gov etc that you can legally work as self-employed whilst on maternity leave. I have talked to Working Tax Credits about the potential impact on those, so have that covered.

The question that remains is: If I register as self-employed and start working as a self-employed person whilst on maternity leave (I do intend also to return to employment at the end of maternity leave), will I retain my SMP until end of maternity leave?

I have persevered for ages to speak to HMRC and finally got through to the relevant adviser who gave me a vague answer that it "seems" to be OK but they don't have it in black-and-white. My employer tried to research it too and got pretty much the same answer.

Can anyone help? I would be very grateful if so! NB I am unlikely to make much money in the initial months of setting up as self-employed but could focus on setting up the business, marketing etc whilst on leave.

You can work for 10 days during maternity leave, which don't have to be consecutive, but even working for 1 hour counts as 1 day. After that you lose benefits (MA, not sure about SMP) but I'm not sure if it stops completely or is pro-rata.

I guess you could do some of the background work before registering it as a business with HMRC, but you'll have to check when a new business needs registering, as I guess this is a bit of a grey area.

One thing I would advise though, if you're planning on having more children in the future, don't register for the small earnings exemption certificate to avoid paying NI. NI is only a few pounds a month, and it will enable you to claim maternity allowance (currently approx £130 per week tax free for 9 months) during any future maternity leaves.

If you are self-employed that doesn't affect your SMP at all. It is black and white in the DWPs technical guidance to maternity benefits. See here, last line of 'working in your maternity pay period'

Bedhog and flowery - thank you so much for taking time to reply to me!

Bedhog - I am not planning to have any more DCs as two is enough for me but that advice is really useful, just in case!

Flowery - that is exactly what i needed to see, thank you so much. There it is in black and white which means i can start up my business tomorrow - thanks a million!