Maternity Leave, SMP & Income Tax

LLM

Please bear with me, it's a bit long winded...

I go on maternity leave on 11th Feb, but, will not be returning to work for my current employers as my contract of employment with them terminates on 12th Feb.

Because of this, they are going to pay me all of my maternity pay in one lump sum in February. So, come February, I will get my February salary PLUS, 6 weeks @ 90% pay, PLUS, 33 weeks @ SMP from 25/3/10. My question is that the letter says the above is subject to 'normal tax and national insurance deductions' however, when I qualify for SMP from beginning of April, I will get a new tax code, and therefore not have to pay tax (or as much tax) on the £124.88 p/w, BUT, if i'm getting it all paid in February, I will get taxed on my 09/10 tax code won't I?

Am I going to be able to claim back any tax, or, will they tax me based on my 10/11 tax code? I am really worried about this as if I get taxed for it this tax year, it means I lose about £1000 of maternity pay which I really can't afford to do. Any help/advice is much appreciated. I have tried my local tax office, waited 20 minutes to speak to someone who fobbed me off by telling me it was an NI query even though I said 'but i'm calling about income tax' so going to have to try again tomorrow, or ring works payroll and see if they know... Oh the stress!

imogenlayla

Hello, if you have a query about SMP try this number 01912255221 its hm revenue and customs and the dept that deals with statutory payments. good luck!

carolissosmiley_2

Hi,

I was in a similar situation.

I took voluntary redundancy as my employer would not guarantee part time on return.

Me and my colleague were both told the same as you that we had to have all our SMP in a lump sum but our babies are not due until April so this was not suitable.

We did alot of fighting with our employers and eventually got them to agree that we can have our SMP paid monthly.

So as it stands now, our SMP will start the end of Feb and will continue until Nov. We will pay a little more tax and NI than we wanted but it was a case of that was the best we could get.

It is a very grey area, SMP should be classed as SMP and not put together with the rest of the years earnings which by all accounts it seems to be,

It is my understanding that if you get it in a lump sum then I think you will struggle to get a rebate on this (sorry don't mean to stress you out) Is it possible to back to your employer and see if you can re negotiate??

We called various people and I think it was the statutory disputes line or the tax office that said paying it in a lump sum is frowned upon... What if you wanted to start a new job in 6 months? It would be so complicated trying to work out what you owed in SMP payments.

Hope this helps and sorry if it makes it worse for you