Tax Credits & SMP/Weird Holiday Pay

kirstle99

Hi All

After reading a thread on here about maternity pay today somethings's sparked off for me and I'm getting a bit worried. Bear with me I'll try to explain as best I can.

Ok, first thing's first, i'm going on maternity leave on 18/6/11. The first lump sum (for 6 weeks @ 90%) is being paid on 23/6/11. Then i'll be getting the SMP every 2 weeks starting 4/8/11. My last SMP payment will be on 15/3/11.

Now, that's all great and everything, but i'm worried about my holidays. The way mine is done is it's based on hours worked and paid for, so I accumulate holiday in money, not in days per year or anything. I can ask for this to be applied any time I like, so i'll clear out what I have to go on my last normal paycheck before my SMP begins.

The problem I have is, every year, on the date you first started with the company, they clear out your holiday pay, whether you want it or not. I started there on 18th January, so basically i'll probably have quite a lot of holiday pay built up between June & January. Is this going to screw up my maternity pay/tax credits claim? I was planning on banking the money they clear out and using it to take holiday on the end of my maternity leave to take me to the end of the tax year 11/12 (my employer has said they are already happy with this). I have checked I will accumulate holiday pay whilst on SMP with another girl who is on maternity leave, so I know it will build up. She has been taking her holiday pay every couple of months since going off.

I won't be doing anything wrong by doing this will I? I know that holiday pay will count as normal earnings and stuff so I'll have to declare it as income for next year's renewal. Have I got all this right? I don't want to get it wrong lol.