Question on Maternity pay

[nehaksal]

Hi,

I have been working for the last 3 years through my own limited company. I am pregnant and due in the next 1 month. I have just stopped working and plan to close down the company in the next 1 month. I have not claimed any SMP through my own company so far. Would I be able to get Maternity Allowance or any benefit from HMRC? I spoke to the maternity allowance jobcentre plus team and they say i am not eligible and need to go through the SMP route. To get SMP , I need to keep my company open and running for next 9 months atleast + more to wait for HMRC to process the refund. In that I would incur legal and accounting costs and most of the money I get through SMP would go to defray such costs.

Any advice on how to proceed would be greatly appreciated ?

[LisaContractorUmbrella]

This link comes up from Google search under maternity payments for self employed https://www.gov.uk/maternity-allowance/what-youll-get

[Martin at NixonWilliams]

To get SMP , I need to keep my company open and running for next 9 months atleast + more to wait for HMRC to process the refund. In that I would incur legal and accounting costs and most of the money I get through SMP would go to defray such costs.

Any advice on how to proceed would be greatly appreciated ?

The above is not true.

HMRC usually process the refund fairly quickly, i.e. during pregnancy or not long after the child is born depending on when you submit your application.

There are also no legal costs and any accountancy fees paid are likely to be very small compared with the SMP reclaimed.

I hope this helps.

Martin

[kingcook]

This link comes up from Google search under maternity payments for self employed https://www.gov.uk/maternity-allowance/what-youll-get

It doesn't sound like she's self-employed. But good link for info anyway.

[LisaContractorUmbrella]

It doesn't sound like she's self-employed. But good link for info anyway.

Good point

[rayb]

I am on Limited Company, my accountant claimed 2 SMPs for me, there was 1 year delay in cheque arriving from HMRC (both times!). I had intention of coming back to work after 1 year break (slightly longer second time), so I kept company dormant instead of closing it. I didnt see the need but my accountant insisted. It incurred accountant fees (negotiated lower fee) but I had a great tax savings, so definetely was worth it.

SMP resulted in around £4200 and accountant asked for 15% of it on top his usual annual fees. So I got £3500 net, plus tens of thousands of pounds saved on tax, for each pregnancy break. If I closed company, I would have paid just under £45,000 in tax for that year. With dormant status, my taxable income was spread over "empty" months and I paid a ridiculous £9,000 in tax. I dont use schemes, this was all standard Limited Company accounting.

Even if you dont need to claim SMP, and still want to close company, see how many "empty" months you need to keep it runnig as dormant in order to minimise you tax. There was no legal work or fees needed for SMP claim.