Maternity and self employed with own business - anyone with experience to advise?

[popsycal]

I am posting this for my sister who is pregnant. She is self - employed and runs her own business and is pretty much a one man band. She pays NI contributions so is ok for SMP.

I have directed her to the DTI website as it has been suggested to her that if she doesn't close down her business while on maternity (I had intended to run a reduced service for her between May and the summer) then she would not be entitled to SMP.

Will get her to ring DTI but in the meantime, does anyone know? She is worrying and panicking as she simply can't close down.

bump

I think...
if she is a sole trader she has to close the business or forfeit her SMP.
If she's a registered company she can employ you to run it and take mat leave.

If she's a sole trader at the moment this might be a good time to incorporate...

It is tricky - she runs her own dancing school.....

No, really, for tax purposes she must be one or the other, and she'll know which she is.

Sorry 0 the tricky but was not at the sle trader thing

she is most definitely a sole trader

ah okj she thinks she is a registered company )but my mum and an accountant do all the money and tax bit......)
is it companies house where i would double check?

Yes, or ask your mum (who will know if she does the tax things) - tbh if she thinks she is she probably is as it's not something you'd bother to do if you didn't need to.

Have just waded through this and am still not 100% clear - good idea to ring the DTI or even the DWP - but so long as she stops working while she's drawing Maternity Allowance (or SMP) I don't think the school needs to close.

yes i just founf the maternity allowance thing

have just emaile dher the dti number anf the number fo the local business link which i have found very helpful in the past

was about to suggest business link...

popssycal - she MUST know whether she is a registered Limited company or not !

She would have had to formally incorporate at Companies House, pay the fees and lodge all the required docs. at the time of incorporation. She will also have received a Certificate of Incorporation from Companies House with a unique company number for her business.

She will also have become the first director of the caompany and would have been required to appoint a company secretary (you can not be a sole director AND company secretary at the same time).

If she can't rememebr doing any of this stuff or appointing a solicitor to do it for her, she is defo. NOT registered as a limited company !

Any way, you can go on to the Companies House website and check. Type in the name of her business (the EXACT name, as there may be other companies with a similar name), click on the details, it will give the date of incorporation, the registeed address of the business, etc.

I don't know the answer to your question re. maternity leave. Beware though, it may not be worth her while incorporating for the sake of mat. leave pay. Incorporating as a company has many implications for a business including strict regulations re. paper work to be lodged with Companies House and different rates of taxation.

Your local Business Link will be extremely helpful in deciding whether or not to incorporate.

i checked at companies house - and she is NOT rehisterd
she is ringing business link tomorrow
many thanks

ok, hope she gets some useful advice !

Just to agree with previous posters, that if she is a sole trader, as you believe she is, then she cannot work at all (or make any money through employing someone else to run things in her absence) during her mat leave, or she will lose the smp.

Agree that it is best to check with official authorities, but this was my understanding when I took mat leave as a sole trader last year.

thank you very much for your advice everyone....

I'm self employed and about to go on mat leave. You can't work at all during mat leave or you do forfeit SMP./

Katie, are you a sole trader or a registered company? I know you yourself can't work, but the question was could your employees go on working in your absence?

I'm a sole trader. Have never really thought about incorporating - what are advantages?

It is actually a little more complicated for us. My sister does not actually have any employees. I would be taking it over at a reduced level for a few months.....

Will get her to ring business link

Well you'd be a self employed person working independently then?

thanks katie rocket
it complicate my employment status further lol
i am already employed and self employed

Cripes! DP does this though. He is employed but also 'part time self employed' for any freelance work he gets. I think as long as you declare it it's fine.

When I'm on mat leave I have a number of different freelancers covering my accounts and they are effectively taking the work over and billing it independently.

katierocket - i think thats what we will do.

Thikn i will have to register AGAIN as self employed as if it is a differetn type of business you have to register separately....

I "think" there may be another way around this. Dh used to be a sole trader doing a similar sort of thing. He now runs it as a partnership rather than a limited company. You could become a partner (would need legal advice to draw the partnership up but it can be done)