Paying class 2 NI contributions and telling HMRC about mat leave when recieving SMP as both employed and self employed!

[Thandeka]

Sorry this is a bit complicated. Basically I qualify for SMP through my employed work (one day a week) so I decided to claim that as it means I can do as much self employed work as I want while on mat leave which if I claimed Mat allowance I would only be allowed to work 10 days. (Yay for loopholes!). My self employed work (consultancy) is flexible and a lot can be done from home.

Anyhow I am being driven mad by the self employed help line, NI conts people and the job centre as they all don't know the answer to this and all keep referring me to each other. Basically do I need to keep paying my class 2 national insurance contributions while I am on maternity leave (as I think they would get paid if I was claiming MA) and wondering about the class 4 contributions from my annual tax return. Do I need to inform HMRC- (which bit- the self employed dept?) about my maternity leave but explain that I am eligible for SMP?

I can't be the only person in the world to be in this situation!

I'm not going to check the manuals for this, partly because I suspect there isn't actually a definitive answer there.

Working from first principals, if you have earnings from self-employment, you must pay Class 2 NI contributions (unless you claim the small earnings exemption). This is true whether or not you are paying Class 1 contributions (on an income from employment), so there is no reason why receiving SMP from your employer instead of a salary should have any effect on the Class 2s.

You do not have to pay Class 2 contributions when you are receiving Maternity Allowance, but that is not because you are receiving MA, it is because you are not actually self employed, because you are on a maternity break. If you are still getting earnings from self-employment (apart from the 10 KIT days), you can't claim MA.

So if you are going to keep up the self-employed work you need to keep up the Class 2s, and you will of course have to pay Class 4s at the end of the year on any applicable earnings.

Or even principles.

Going back to the title of your thread, you don't need to tell HMRC about being pregnant because you are not taking maternity leave from your self employment.

Ta muchly MrAnchovy. That all makes sense.

Thandeka Surely such a loophole doesn't exist. I hope it doesn't because it's not right to claim that extra money.

Erm! Yes it definitely does exist and have it in writing from HMRC and see this link www.hmrc.gov.uk/manuals/spmmanual/spm21115.htm . If I was in fulltime employment I would be getting ALOT more maternity pay than I actually am as I am only claiming the statutory minimum and not taking anything above that. I only went self employed recently and I am not planning on doing that much while on maternity leave but having the flexibility to do more than the 10 KIT days means I can afford to be off longer with the baby rather than rush back into fulltime employed or self employed work. Sorry if you think it's not right to claim the money, but I have a right to SMP and I have a right to self employed work according to the HMRC and since that is the situation I am in and those are the HMRC rules I am not going to cut off my nose to spite my face on this one. I will continue to pay all my self employed Class 2's and Class 4's and tax return as normal now that bit makes sense to me! So its not like I am claiming anything I am not entitled to claim under the rules.