Tax credits - deducting SMP?

rachymoo

Hello,

I am a little confused, and hoping someone can help. My second child arrived in March 2011 and I took 9 months maternity leave. Now the time has come to do my tax credits renewal so I am sat trying to calculate my last year’s income. The thing I need clarifying is to do with deducting SMP from income – I know that you deduct £100 per week but I’m not sure for how many weeks I’m supposed to do this – is it for the weeks where I received ONLY SMP or is it for all weeks I received SMP (regardless of what I was paid on top?).

The reason I ask is that where I work, the maternity leave provides for 8 weeks on full pay, 16 weeks on half pay + SMP, then 15 weeks on SMP only. (I wasn’t sure if the 8 weeks on full pay included SMP so I checked with payroll and they advised me “When on full pay, SMP is paid but then offset as you don’t receive SMP and full pay at the same time, SMP kicks in when you go on to half pay” – that’s confused me even more to be honest!)

So I guess my question is, do I deduct £100 per week for a) the whole 39 weeks of my maternity leave (I’m guessing this is probably no, but just want to be sure), b) the 16 weeks half pay + SMP and 15 weeks of SMP only, so 31 weeks altogether, or c) just the 15 weeks of SMP only?

Thank you very much in advance for your help!

rachymoo

Anyone?

drrat

Where was the source of the income from?

Did your work pay you? If so Just use your P60.

I don't uderstand why you would need to deduct anything. You just need to inform them of your income. Your P60 will contain everything you got from your employer. If your employer paid you the SMP then the bottom line p60 figure is all you need provide I would have thought.
If you got SMP seperatley then declare that also, as that is also an income.

When I have taken paternity leave in the past, my employer paid me full salary anyway and they claimed the statutory payment to recoup some of their cost.

I simply reported my bottom line P60 as normal.

carebear13

you deduct it for any weeks that you recieved mat pay for, statutory or contractual. if you look at your p60 it will give you the total pay an then in the smp box it will tell you how much, take that away from your total earnings and that is the figure you give tax credits. i know cos this is the 4th time i have done it. hth

rachymoo

I was surprised too, but apparently you are supposed to deduct SMP from your income. I wasn’t aware of this when I had my first child so I never did! But I have since been told (and have read it on here, somewhere) that you should deduct SMP from the income you declare on your tax credits claim.

drrat

if in doubt just phone them up with your P60 at the ready. I always renew over the phone anyway.

drrat

Well if you can deduct you may as well, the lower your income in respect of the claim the better anyway.

rachymoo

In fact, I’ve just checked on the HMRC website here: http://www.hmrc.gov.uk/taxcredits/start/claiming/income-hours/employment-income.htm which tells you how to work out your income and what you should deduct from it, and SMP is one of them. It says to add up the total amount of SMP you received, but not to include more than £100 for any particular week. So I guess I’ve kind of answered my own question there!

I’ve just checked with payroll and they’ve advised that I received £3,871.90 SMP in total. I received SMP for 31 weeks in total. £3,871.90 divided by 31 is £124.90, clearly I shouldn’t take off this amount because it says not more than £100 per week – so by my calculations: £100 x 31 weeks = £3,100 – this is what I should deduct from my income. Does anyone know if that’s correct? I guess if no one knows for sure then I am best to just phone them. Just thought I’d see if anyone knew first.

rachymoo

In fact just found this thread... https://forums.moneysavingexpert.com/discussion/2321105

carebear13

hi - yes sorry my post should of read to deduct 31 weeks @ £100 a week. did you only take 31 weeks though or did you have 39 weeks, basically you need to deduct either £3100 or £3900. i will be taking 39 weeks so i have deducted £3900.

Icequeen99

rachymoo wrote: »

In fact, I’ve just checked on the HMRC website here: http://www.hmrc.gov.uk/taxcredits/start/claiming/income-hours/employment-income.htm which tells you how to work out your income and what you should deduct from it, and SMP is one of them. It says to add up the total amount of SMP you received, but not to include more than £100 for any particular week. So I guess I’ve kind of answered my own question there!

I’ve just checked with payroll and they’ve advised that I received £3,871.90 SMP in total. I received SMP for 31 weeks in total. £3,871.90 divided by 31 is £124.90, clearly I shouldn’t take off this amount because it says not more than £100 per week – so by my calculations: £100 x 31 weeks = £3,100 – this is what I should deduct from my income. Does anyone know if that’s correct? I guess if no one knows for sure then I am best to just phone them. Just thought I’d see if anyone knew first.

I would get this checked out because you were on maternity leave 39 weeks, and so they should have paid you SMP in the first 8 weeks (the full pay should include it).

See http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1080903421&type=RESOURCES

Where it is made clear they can pay enhanced (contractual) maternity pay above SMP, but they still pay the SMP.

IQ