Question for freelance mums who got maternity allowance.

[Lambkin689]

I am a sole trader. I pay tax on a receipt basis, so I don't submit invoices to HMRC, just bank statements, and am taxed according to all the payments that have gone into my account during the tax year regardless of whether I did the work outside the tax year. I'm going to be receiving maternity allowance from 6th June. I understand that I am not allowed to work while receiving Maternity Allowance. However, the companies I freelance for normally pay me about 70 days after I have delivered the work (they are foreign companies and this is the norm in the countries where they're based). This would mean that work invoiced at the end of March won't be paid until mid June. My Maternity Allowance period begins on 6th June. Do you think this will be a problem and will mean that my maternity allowance payments will be cancelled or will need to be repaid if they see I've been paid within that period? Do I need to ensure all outstanding payments are transferred before 6th June?
Thank you!!

Im commenting as a placeholder as im the same boat and really confused about it. I will stop working when baby arrives but i do get a small amount of passive income through licensing agreements. No where near enough to live on, but again maternity allowance says you cant earn anything so im really concerned.

@PregnantAgainOhMy

Im commenting as a placeholder as im the same boat and really confused about it. I will stop working when baby arrives but i do get a small amount of passive income through licensing agreements. No where near enough to live on, but again maternity allowance says you cant earn anything so im really concerned.

It's quite a niche issue, I wonder if it's something we'll need to take to Citizens Advice.

@PregnantAgainOhMy

Im commenting as a placeholder as im the same boat and really confused about it. I will stop working when baby arrives but i do get a small amount of passive income through licensing agreements. No where near enough to live on, but again maternity allowance says you cant earn anything so im really concerned.

Otherwise I guess we'll have to ensure all the outstanding payments aren't made until after the Maternity Allowance period :/

It was 8 years ago that I got MA but my understanding was that you can’t work, not that income can’t come in.
The people who will know are www.doingitforthekids.net/

[quote museumum]It was 8 years ago that I got MA but my understanding was that you can’t work, not that income can’t come in.
The people who will know are www.doingitforthekids.net/[/quote]
Ooh thanks. Will try contacting them on FB.

@PregnantAgainOhMy

Im commenting as a placeholder as im the same boat and really confused about it. I will stop working when baby arrives but i do get a small amount of passive income through licensing agreements. No where near enough to live on, but again maternity allowance says you cant earn anything so im really concerned.

Got this response from DIFTK

"I'm not an accountant so I would suggest posting this question into the group.
BUT based on what you've said, and my personal experience of maternity allowance, you shouldn't have any issues. HMRC are not watching you that closely.
As long as your class 2 national insurance payments are up to date and your earnings are enough during the test period.
All the info on eligibility here: www.gov.uk/maternity-allowance/eligibility"

Thank you so much for posting the response from them! That definitely makes me feel a lot less stressed!

@PregnantAgainOhMy

Thank you so much for posting the response from them! That definitely makes me feel a lot less stressed!

Might be worth double checking with citizen's advice or an accountant, but it sounds promising. Will let you know if I find out anymore.

When I claimed 8 years ago nobody checked anything. I emailed them my KIT days but I doubt anybody even read the emails.

I was going to suggest the Maternity Alliance as well.

I'm a sole trader and my understanding is the same as museumum's - that you will lose MA if you work more than your KIT days, but it's not a problem to have money coming in for work done prior to maternity leave.

In fact, my understanding of self-assessment, is that income should be attributed to the tax year in which it was earned and invoiced for, not when it was paid.

I In fact, my understanding of self-assessment, is that income should be attributed to the tax year in which it was earned and invoiced for, not when it was paid.
Even if your accounting is on cash basis?

The issue is I lay yax on a receipt basis. I'm taxed for what I'm paid in a tax year, not for the work I've done...

Pay tax*

@PregnantAgainOhMy

Im commenting as a placeholder as im the same boat and really confused about it. I will stop working when baby arrives but i do get a small amount of passive income through licensing agreements. No where near enough to live on, but again maternity allowance says you cant earn anything so im really concerned.

I received this response from Maternity Action. Think it answers our question!

"You can receive payments for work done prior to your Maternity Allowance (MA) period and it will not affect your entitlement to MA. The fact that these are late payments will not be treated as work during your MA period.

You can also work for up to 10 days during your MA period without losing your MA. You should keep a note of days worked and report them to DWP once you've completed 10 days. Please note that they treat any work, even just one hour, as a full day of work.

As you are self-employed they will ignore unpaid admin work that you need to do to keep your business going and this will not use up one of your 10 days.

If you work more than 10 days during your MA period, DWP should make a reasonable disqualification. In practice they often end your MA payments completely after you've worked for 10 days but they should make a proportionate reduction in your MA payments if you have not yet returned to your normal working pattern e.g. you used to work full-time and you work for 1 day a week. If this happens you can appeal and Maternity Action's casework service may be able to provide more help.

There is more information on working during your MA period here: maternityaction.org.uk/advice/maternity-and-parental-rights-for-self-employed-parents/"