Self employment and Maternity allowance.

Doodlebug1

Hi all,

Was wondering if someone can help me. Please be gentle!
I have been doing some tutoring since midish sept 2011, for an agency and for a new agency since Nov (overlap) and been steadily making on average around £40 - £50 a week since then, some weeks more or less depending on demand. I figured as I would never earn above the threshold for the year that there was no point declaring it to HMRC as I wouldnt be entitled to anything and wouldnt have to pay tax on it anyway. Before anyone else says it, I know thats wrong but after having encountered with HMRC in previous jobs with tax etc its put me off ringing them for life!! but still aware i should have done - guess i just wasn't too fussed. Now the issue is that I am currently 29 weeks pregnant, due 9th april.
I genuinely didnt think i was entitled to anything until someone mentioned it to me that I may be entitled to Maternity allowance. Now obviously that would really be helpful as I was will have to stop tutoring for a while after the baby arrives (plan to breastfeed as I did previously and will be attached to baby until routine is established enough for me to leave him/her).
My question is what do I do next can I declare that I have been self employed since sept and will i still be entitled to MA and qualify? From my understanding I would recieve a certificate exempting me from NI payments and will recieve around £27 a week.

Any help appreciated

xylophone

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Expectingorbringingupchildren/DG_10018869

Rmeek

Hi there. You are supposed to register as self-employed within 3 months (I think or as soon as you do become SE or they could fine you £100) of being self-employed so they might query why you haven't (if you do) also if you do declare self-employment from whatever date, they can back date class 2 NI contributions (you can pay them no matter what you earn they are voluntary and if you do pay full contributions you are automatically entitled to the full rate of Maternity Allowance, no matter what your weekly earnings are, just advise them you aren't sure what your earnings will be for the year end). The full weekly rate is currently £128.73 per week providing you have worked for 26 weeks in your test period (66 weeks before your due date) and made Class 2 NI contributions within your 26 weeks of work you declare. You might have to wait until last minute to claim to make sure you fit your 26 weeks in before your due date so to speak. Good luck and congratulations!

Rmeek

Just as an aside...this is an excellent link posted by a self-employed mum running her own business...helped me massively! Click here

ceeforcat

Rmeek wrote: »

Hi there. You are supposed to register as self-employed within 3 months (I think or as soon as you do become SE or they could fine you £100) of being self-employed so they might query why you haven't (if you do) also if you do declare self-employment from whatever date, they can back date class 2 NI contributions (you can pay them no matter what you earn they are voluntary and if you do pay full contributions you are automatically entitled to the full rate of Maternity Allowance, no matter what your weekly earnings are, just advise them you aren't sure what your earnings will be for the year end). The full weekly rate is currently £128.73 per week providing you have worked for 26 weeks in your test period (66 weeks before your due date) and made Class 2 NI contributions within your 26 weeks of work you declare. You might have to wait until last minute to claim to make sure you fit your 26 weeks in before your due date so to speak. Good luck and congratulations!

No - you have quoted the old rules for Self Employment notification. See below:

http://www.accountingweb.co.uk/topic/tax/new-rules-registering-self-employed

Doodlebug1

Rmeek wrote: »

Hi there. You are supposed to register as self-employed within 3 months (I think or as soon as you do become SE or they could fine you £100) of being self-employed so they might query why you haven't (if you do) also if you do declare self-employment from whatever date, they can back date class 2 NI contributions (you can pay them no matter what you earn they are voluntary and if you do pay full contributions you are automatically entitled to the full rate of Maternity Allowance, no matter what your weekly earnings are, just advise them you aren't sure what your earnings will be for the year end). The full weekly rate is currently £128.73 per week providing you have worked for 26 weeks in your test period (66 weeks before your due date) and made Class 2 NI contributions within your 26 weeks of work you declare. You might have to wait until last minute to claim to make sure you fit your 26 weeks in before your due date so to speak. Good luck and congratulations!

wow thanks for all that info,really appreciate, didnt think anyone else posted until just checked it by chance. I don't mind paying the fine if there is one as thats very much my fault. I have registered on the website that I would like to be declared as full time so I guess I'll have to wait and see what happens next. Just one question, I found this

'The amount you get depends on your gross average weekly earnings. You will get the standard rate of MA, which is £128.73 a week (from 11 April 2011 ) or 90 per cent of your gross average weekly earnings, if this calculation results in a figure which is less than the standard rate of MA.'

As my average is around £40 wouldn't it be 90% of that and not the full £128.73? in which case is it still worth me paying the class 2 contributions?

Rmeek

That only applies to people that are employed but can't get Maternity pay through their employer (not worked for them long enough etc, etc), and the self-employed that have opted to register for a small earnings exception certificate so they don't have to pay Class 2 NI contributions (if earning £5k or less a year). You are under no obligation to do this and can pay full contributions no matter what you earn or think you will earn.

If you are registered self employed and you've paid class 2 contributions up to date, (13 weeks worth paid within your 66 week test period) then you are automatically assessed as having enough earnings to get the higher rate regardless of what you earn. Naturally it would always be sensible to do this so you are covered.

Doodlebug1

really?? surely thats a massive flaw in the system, not that I'm complaining as it would truly benefit me!! Will I be able to back date the class 2contributions and pay them out in full to be entitled or will that just look really dodgy? I'd rather just pay the class 2 contributions in full rather than installments ..

ps that website is fab, thanks for that!!

Rmeek

Well I guess our government just want to make sure we are all entitled to equal monetary support when on maternity leave. It is very generous I agree. But luckily for us SE ladies it is a weight off our minds When contacting NI initially just say you want to pay a year up front. Not sure if they will let you as they collect in arrears. Leave it a while before letting them know about the pregnancy. As long as you declare your earnings to the tax man and register SE you only have to fulfill the 2 rules of working 26 weeks within your 66 week test period and making at least 13 weeks worth of class 2 NI contributions within that 26 weeks.

Rmeek

P.s. they automatically backdate the NI payments to when you declare you have been self employed from. They will ask how much you earn in a year to try to see if they can benefit you by having a small earnings exemption cent. I just told them I'm not sure what i'll earn so want to make the contributions anyway.

Savvy_Sue

Doodlebug1 wrote: »

really?? surely thats a massive flaw in the system, not that I'm complaining as it would truly benefit me!! Will I be able to back date the class 2contributions and pay them out in full to be entitled or will that just look really dodgy? I'd rather just pay the class 2 contributions in full rather than installments ..

I could hardly believe it myself when I discovered this 'flaw' over 20 years ago, but I used it twice to good effect.

Don't forget to get a certificate of exemption for low earnings though: others will advise if you need to wait until after baby to do this!