Employing spouse and maternity benefits

Kerryatter

I wonder if anyone can help me? I know absolutely nothing about tax, employing staff or benefits (doesn't bode well does it?!:rolleyes: ) We don't earn enough to pay for an accountant so any help or advice would be gratefully received.

My husband and I set up our business last year, and he registered as a sole trader (he does the work, I do the admin for free). I'm a stay-at-home mum with no income and all money from the business (after expenses etc) is considered 'wages' and goes straight into our personal bank account and pays for our bills, food etc.

I had a baby 5 weeks ago but am currently not eligable for maternity benefits - Is it possible for my husband to employ me and pay me a salary and claim for maternity benefits retrospectively?

Many thanks for your help.

fengirl_2

If your OH tried to register as an employer retrospectively, he would be in trouble with HMRC for not registering when he first employed you. Also, how is he going to prove payments to you from a year ago? How is he going to explain not paying tax and NIC for you?

More trouble than it's worth and would most certainly be queried, especially as you are married and it's his business.

Pennywise

Kerryatter wrote: »

I wonder if anyone can help me? I know absolutely nothing about tax, employing staff or benefits (doesn't bode well does it?!:rolleyes: ) We don't earn enough to pay for an accountant so any help or advice would be gratefully received.

My husband and I set up our business last year, and he registered as a sole trader (he does the work, I do the admin for free). I'm a stay-at-home mum with no income and all money from the business (after expenses etc) is considered 'wages' and goes straight into our personal bank account and pays for our bills, food etc.

I had a baby 5 weeks ago but am currently not eligable for maternity benefits - Is it possible for my husband to employ me and pay me a salary and claim for maternity benefits retrospectively?

Many thanks for your help.

Penny pinching and not having an accountant has cost you dear I'm afraid. Your husband should have registered as an employer and paid you a wage commensurate with your hours worked, skills needed, etc. Not only would that have given you the rights to maternity pay, but it would have also enabled him to pay you a wage that was deducted from his business profits, thus saving him tax and NIC and using up your personal tax free allowance. If it had been just a couple of months late, then there'd be the potential of a back dated claim and doing the formalities etc., but it is already several months after the 07/8 tax year, so even if he could somehow manage to register over a year late, you'd be facing quite hefty penalties for late submissions of the payroll annual returns etc. Sorry but you've very little chance of getting HMRC to accept such a late registration especially when there is absolutely no evidence of intention to pay wages etc - i.e. no "wages" paid to you by the business and presumably no contract of employment, etc.

stphnstevey

If you could explain the rules for claiming maternity benefit and how you missed out, it might help others give you advice.

Kerryatter

I thought that this might be the case.

Many thanks for your replies.

Savvy_Sue

OK, it's too late for this baby, but your DH could register as an employer now, and start employing you. You / the business would then get the non-maternity benefits outlined by others!