Self Employment & Maternity Allowance

boo80

I wonder if anyone can help me? I run a small party business and am hoping to take some time off for maternity leave in a couple of months. Can I ask a friend to run the business for me in a self employed capacity? Would I need to give her details to HMRC? I find the whole HMRC thing so confusing!

Brassedoff

boo80 wrote: »

I wonder if anyone can help me? I run a small party business and am hoping to take some time off for maternity leave in a couple of months. Can I ask a friend to run the business for me in a self employed capacity? Would I need to give her details to HMRC? I find the whole HMRC thing so confusing!

Yes you can have anyone you like run your business for you, providing you are not on a franchise and contracted not to.

Will you you be ensuring you remain in charge of your banking?

boo80

Yes, all the banking is in my name, and my friend has no financial connection to the business, hopefully that means she would still be self employed?

It's not a franchise, I started the business myself and the main reason I don't want to stop the business running is because it may be a struggle to start it up again when I come back. Thanks for your help. x x

Savvy_Sue

I'm just wondering how it works when you're going to let someone else run it while you take some maternity leave, and then just take it back from her when you're ready to come back - if you want to grow the business you might want to consider some kind of ongoing partnership.

If you're claiming maternity allowance then you're not supposed to do any work at all.

I think it needs some careful thought.

boo80

I wouldn't mind working with her in a partnership, but she doesn't have any money to put into the business and I've done a lot of work setting it up so I don't think a straight forward partnership would work...

I've looked into MA and I'm pretty sure we could make it work, but I'm just slightly concerned that she would be an employee rather than self employed?

In the past I've gone back to work when my babies were 2 weeks old, but as this is my last baby and I'm getting older I'd really like to take some time off this time..

Thanks for your message. x x

Savvy_Sue

Would it be a huge issue to employ her on a temp zero hours contract?

boo80

I looked into it, but if she's my employee I have to pay her tax and NI and I don't think I can afford to. I don't even earn enough to pay NI myself.

I've just looked into it a bit more - 'For all employees earning more than £149 a week you have to deduct Class 1 National Insurance contributions (NICs) from their pay.' She wouldn't earn that much so I guess that wouldn't be an issue? Sorry, I find it all so confusing!!

What difference would it make if she was self employed or employed by me?

Savvy_Sue

If you employ someone, you give them a contract, which means you have more control over what they can and can't do - for example, you could have a clause preventing her from working in a similar line to yours within a x mile radius within 2 years of stopping working for you. You can't do that if she's self-employed. Also, if I'm self-employed I expect to charge a higher rate than if I'm employed: I won't be getting holiday pay, sick pay etc, I'll only be paid for the hours I actually work.

There are pros and cons for each.

BTW, is it worth considering a partnership even if she can't pay in? She'd be the junior partner, you'd still make all the decisions, you don't have to be equal partners (and it's often not a good idea anyway!)