PAYE AND Self Employed Maternity Leave

TwistedHelix

Hi All,

To begin - I am aware self employment does not allow for SMP etc, I am not asking that. Thought I should clarify that as I have asked so many people HMRC included and they don't seem to understand my question. So here it goes.

My wife is currently on a PAYE job salary. She is pregnant and will be going on maternity leave. HOWEVER, she is currently halfway through a series of courses to license her for a new job she will be self employed in - at the same time she is PAYE employed.
Tax wise this is simple - just add up PAYE with self employed income and send off tax returns.

However Maternity leave is a weird one. Apparently you have 10 KIT "Keep in Touch" days, and if you go over this, you forefeit your Maternity Pay as you have worked enough hours in that period of leave to constitute as working.

The self employed job my wife will have can be done throughout her maternity period as and when - does this forefeit the maternity pay from her PAYE employer?

Because she will be doing more than 10 days most likely in that role but it is separate from the PAYE system.

Logic dictates they are separate and are treated separate, but when the UK legal and tax/benefits system is involved I find a "You will probably get shafted either way" mentality tends to hold water 99% of the time.

Anyone know if they are treated separate and my wife can do as she pleases with her self employed work and recieve PAYE maternity pay from her PAYE employer.

TwistedHelix

I should add - She will be registering herself as an Ltd I believe etc - just in case that changes any of the rules.

Dox

See if this helps:

If you are getting SMP from one employer and, before your baby is born, you do some work for another employer, your SMP is not affected.

Your SMP will stop if after the baby is born, but before the end of the Maternity Pay Period, you work for an employer who did not employ you in the qualifying week. It is your responsibility to tell the employer paying you SMP about your new job. You must do this as soon as possible, and make sure you return any SMP payment you get that covers the week you started work and any part of the period after you resumed work.

If you do any work in a self-employed capacity during your MPP, then such work will not affect your SMP. [
Remember that if your wife sets up a limited company (generally a good idea!), she will cease to be self-employed but will be an employee of that company.]

Working in the MPP for the employer paying you SMP - Keeping in Touch (KIT) days
You can work under your contract of service for the employer paying you SMP for up to 10 days during your MPP without losing any SMP. These special days are known as KIT days.

KIT days are intended to help you keep in touch with your workplace and allow you to do some work during your Maternity Pay Period without affecting your SMP. They could also help ease your eventual return to work. The type of work you do could be attending work for a training course or for an appraisal interview. These are just examples, but whether you take advantage of these days is your choice - both you and your employer should agree that you can work on those days. Your employer does not have any right to insist that you work.

Any work you do as a KIT day, even as little as half an hour for example, will be counted as a whole day for KIT days. They can be taken as single days; in blocks of two or more days; or can be taken consecutively. Once you have used up your 10 KIT days and you do any further work, you will lose a week’s SMP for the week in the Maternity Pay Period in which you have done that work. If a week in your Maternity Pay Period contains only KIT days, you will be paid SMP for that week. If a week in your Maternity Pay Period contains the last KIT day and you do a further days work in the same week for the employer paying you SMP, you will lose SMP for that week.

For any KIT days that you work under your contract of service for the employer paying you SMP, your employer must pay you the SMP due for that week as a minimum. Any contractual payment for the work done as a KIT day, will depend on the agreement between you and your employer.

Source: https://www.gov.uk/government/publications/maternity-benefits-technical-guidance/maternity-benefits-technical-guidance

TwistedHelix

Thank you Dox for the source material - that gov site sure does hide some of its pages as I have gone through that site a lot over this.

If one makes an Ltd and is considered an employee, would it still be possible to receive MP from the other employer? I assume many women work 2 jobs? I assume they have to pick the main employer and go through them? Just wondering if setting up an Ltd is still doable and not miss out on any MP.

It is good to know however that self employed status is kept separate and can be done during Maternity leave.

Dox

TwistedHelix wrote: »

T
If one makes an Ltd and is considered an employee, would it still be possible to receive MP from the other employer? I assume many women work 2 jobs? I assume they have to pick the main employer and go through them? Just wondering if setting up an Ltd is still doable and not miss out on any MP.

If you re-read this bit, I don't think so:

Your SMP will stop if after the baby is born, but before the end of the Maternity Pay Period, you work for an employer who did not employ you in the qualifying week. It is your responsibility to tell the employer paying you SMP about your new job. You must do this as soon as possible, and make sure you return any SMP payment you get that covers the week you started work and any part of the period after you resumed work.

Savvy_Sue

I agree with Dox: there's a risk of her losing her SMP from her original employer.

And does she know what her contract says about doing other work when not on m/l? Because some employers say 'no', some say 'you must tell us' and some say 'you must get our agreement'.