Maternity Pay after redundancy

aliceg1989 Posts: 7
First Anniversary Combo Breaker
edited 7 August 2021 at 6:39AM in Redundancy & redundancy planning
Hi, just looking for a bit of advice. 

I was made redundant in May, and my last wage as an employee was paid to me at the end of May. I have not entered new employment since.

I am currently pregnant and because of my last working day being the day it was, I actually qualified for Statutory Maternity Pay. This is paid to me by my former employer and not by the state (ie. not maternity allowance). 

My Statutory Maternity Pay started at the end of June, and I received my first payment in July. This was paid to me by my employer. I noticed on my payslip that I had been taxed with the code 0T W1M1 (emergency tax). I called HMRC to query this, and they advised that my tax code hadn't changed in 3 years and was still the bog standard one - 1257L. They issued my employer that same day, following the telephone conversation, a reminder of what my tax code actually was (1257L). I informed my employer that a "new" tax code was on its way to them and to please update their records to ensure that I wouldn't be emergency taxed again. 

My August Statutory Maternity Payment is due to me in a couple of days, and my employer got in touch with me the other day to say that this payment will also be taxed on a 0T W1M1 basis (emergency tax again). They said that as the Statutory Maternity Payments are effectively payments after I have left employment, per HMRC guidance, tax code 0T W1M1 has to be used for any payments made to employees after they leave. They said that I will be able to reclaim any overpaid tax from HMRC once the tax year ends (8 months off, which doesn't help me in the interim where I have bills to pay and children to feed!). 

This doesn't seem very fair to me. I spoke to HMRC again yesterday and they said the easiest way to resolve this, is by asking my employer to revoke the P45 that they have submitted to HMRC, showing my last employment date as being the end of May. Their understanding was that my employer has jumped the gun by submitting this P45 as they are still paying me my maternity payments. 

It may be worth noting that no payment of any kind (wage or Maternity Pay) was paid to me in June. 

What date should be on my P45? My last official working day, or the date in which my last Statutory Maternity Payment is paid to me (this will be March/April 2022)?

I haven't even received a P45 from my employer, nor have I requested one, yet it seems as though one has been issued to HMRC? 

I'm just looking for some guidance before I go back to my employer. Is what HMRC are saying, correct? 


  • chrisbur
    chrisbur Posts: 4,014
    Name Dropper First Anniversary First Post
    Yes HMRC are correct.  There was no need to issue a P45.  The tax code of 0T week 1 month 1 is the correct tax code to use for any payment made after the issue of a P45 ( though it is not the emergency tax code that is something completely different) but as they say there was no reason to issue the P45 and as they seem happy for it to be cancelled that would seem the obvious answer.  
    However some employers do not take kindly to being corrected over errors in operating payroll so there is one thing you should bear in mind.  A lot of employers in this situation rather than continue to pay the SMP month after month will just pay up all that is owed as a lump sum which sometimes results in increased tax and always results in increased national insurance.  

    Might be worth keeping a check if any alabaster payments are due as some employers do sometimes forget these.
    Details here....

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