Reply to: NI - Maternity Allowance

[NotAllThere]

Not sure on this Dave, as there are two Co Directors? Blimey I'm confused now. Also slightly confused (and annoyed with self for not noticing before) that he doesn't seem to have deducted N.I as well as PAYE etc when invoices go through.

Why should he deduct NI / PAYE from the invoices?

Ltd Co invoices client. Client pays invoices. (with VAT°). Ltd Co pays employees their salary, deducting NI, PAYE. Ltd Co pays HMRC the NI and PAYE + Employers NI. ( Ltd Co pays VAT to HMRC, after deducting VAT from expenses ). Ltd Co pays dividends out of profits to the shareholders.

° If VAT registered.

It looks to me that you and your accountant are talking at cross-purposes.

[Sysman]

Yup, that makes sense to me. My accountant is a family friend, and he's confused me recently by saying he's been looking into what help I can get 'from the government' while off work. I had been under the impression that would be zero, as my Ltd Co would be responsible for paying me maternity pay. So what the fluff is he on about. He keeps whittering on about me having been 'registered self employed', too.

As a general rule of thumb don't do business with family or friends. That way you can feel freer to drop them in favour of someone else or go legal on them if it really comes to that.

Many accountants only deal with pubs, builders and shop keepers (who are mainly self employed) and they really don't understand the business of having to run a limited company to get contracts through an agency. let alone IR35 issues. This may be where the confusion is arising.

Please do yourself a favour and do as others here suggest - get an independent accountant who is used to dealing with IT contractors.

[chris79]

There's some criteria you have to meet, which is employed for x weeks (26 I think) before you claim or so, and also your average weekly earnings must be over a certain level. I'm not 100% sure but I think it may be the case that you can just pay yourself a large sum between now and maternity leave to get you above that minimum average threshold, but you may have to have shown as being PAYE for the last 26 weeks or so..

You would be far better off speaking to a good accountant on this, my other half works for our company part-time on a separate contract 16 hours a week and she qualified. HMRC sent me a nice cheque in the post to cover the full amount in one go before it started being paid.

Have a look over here.. I think this might give some detail:-

http://www.hmrc.gov.uk/employers/emp...regnant.htm#14

Also I'm sure that if you don't qualify for SMP, you get some other benefit instead which is roughly the same amount.. try a search on the forum here, I'm sure I read it here some time ago.

[Grinder]

Unfortunately, it sounds like this family friend is a chump. Get some proper advise sharpish. Provided yourco is paying you a salary (even if minimal) your NI is being paid under PAYE as an employee. Does he do your PAYE returns?

[Platypus]

It sounds like he's confused about the definition of a sole-trader.

I'd agree with that. If you're operating through Ltd you defo should not be registered as self-employed. NI (ees and ers) is paid by your employer (YourCo) and not from your personal bank account.

[MaryPoppins]

Sounds like you need to get down there sharpish on Monday morning and find out exactly what's been happening, then talk to one of the big accountant groups like Uptons,SJD or Nixon Williams for a second opinion.

Ta, will do.

[DaveB]

Sounds like you need to get down there sharpish on Monday morning and find out exactly what's been happening, then talk to one of the big accountant groups like Uptons,SJD or Nixon Williams for a second opinion.

[DimPrawn]

I'd call an accountant (look in business for usual suspects) and have a chat.

[MaryPoppins]

Not sure on this Dave, as there are two Co Directors? Blimey I'm confused now. Also slightly confused (and annoyed with self for not noticing before) that he doesn't seem to have deducted N.I as well as PAYE etc when invoices go through.

[DaveB]

It sounds like he has assumed you are working as a sole trader. ie "Mary Poppins trading as YourCo."

If so you need to sort it out smartish as there could be some nasty tax implications lurking in there.

[Moscow Mule]

Yup, that makes sense to me. My accountant is a family friend, and he's confused me recently by saying he's been looking into what help I can get 'from the government' while off work. I had been under the impression that would be zero, as my Ltd Co would be responsible for paying me maternity pay. So what the fluff is he on about. He keeps whittering on about me having been 'registered self employed', too.

It sounds like he's confused about the definition of a sole-trader.

[MaryPoppins]

Ltd does not = self employed. You are, or should be, an employee of YourCo Ltd.

YourCo should be responcible for paying employers NI and deducting and paying you NI contributions on your behalf. It should also be responcible for administering any Maternity Pay/Leave etc.

Who is your accountant?

Yup, that makes sense to me. My accountant is a family friend, and he's confused me recently by saying he's been looking into what help I can get 'from the government' while off work. I had been under the impression that would be zero, as my Ltd Co would be responsible for paying me maternity pay. So what the fluff is he on about. He keeps whittering on about me having been 'registered self employed', too.

[DaveB]

Well, see I dont know, this is where I got slightly confused, too. This is all based on what my accountant said to me yesterday - before then I had no idea about having to pay NI, didnt think it was relevant.

To me, Ltd Co does not = self employed? Am I being a moron?

Ltd does not = self employed. You are, or should be, an employee of YourCo Ltd.

YourCo should be responcible for paying employers NI and deducting and paying you NI contributions on your behalf. It should also be responcible for administering any Maternity Pay/Leave etc.

Who is your accountant?

[MaryPoppins]

Well, see I dont know, this is where I got slightly confused, too. This is all based on what my accountant said to me yesterday - before then I had no idea about having to pay NI, didnt think it was relevant.

To me, Ltd Co does not = self employed? Am I being a moron?

[Platypus]

I'm confused here - if you're working through your limited company then being self-employed doesn't come into it. If you ARE self-employed, then yes you should be paying NI out of your bank account. If so, why the Ltd Co?