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Statutory Maternity Pay

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    Statutory Maternity Pay

    I am an Employee and Director of a Limited Liability Company and pregnant. I was wondering whether anyone has any experience with statutory maternity pay / SMP? I know that I am eligible for SMP, but I read that Directors often draw artificial bonuses to maximise maternity pay.

    Also, is it correct that I can keep on working for the company (after having the baby) and as long as it is no more than 10 days per months, keep the SMP?

    Thanks a lot!

    #2
    Here you go, everything you ever wanted to know about contacting and maternity pay...

    I believe the post may answer your question but it is pretty old

    http://forums.contractoruk.com/accou...tml#post950677

    Failing that here are all the posts on maternity pay we have had.

    maternity site:forums.contractoruk.com/accounting-legal - Google Search
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Statutory Maternity Pay is paid to female employees who have had, or are about to have, a baby provided they have been in the same employment throughout their pregnancy and is compulsory where the employee fulfils certain requirements.

      The Requirements
      SMP is payable provided the employee has:
      • taken her maternity leave, no SMP is payable for any week in which the employee does some work
      • given 28 days notice of her maternity leave (unless with good reason)
      • provided medical evidence with a form (MATB1)
      • been employed continuously for 26 weeks up to and including her qualifying week
      • had average weekly earnings above the Lower Earnings Limit in the relevant period.

      It is important to note that mothers have a legal entitlement to take up to 26 weeks off around the time of the birth of their baby whether or not they qualify for SMP. In addition, subject to 26 weeks service up to and including her qualifying week, many mothers have a legal entitlement to take up to a further 26 weeks unpaid leave so that many mothers can choose to take up to one year off in total.

      The Amount Payable
      SMP is payable for a maximum of 39 weeks at the following rates in 2012/13:
      • first six weeks at 90% AWE (see below)
      • up to a further 33 weeks at
      - 90% of AWE or
      - £135.45 per week, whichever is the lowest.

      SMP is treated as normal pay and taxed accordingly.

      Average weekly earnings (AWE)
      AWE need to be calculated for two purposes:
      • to determine if the employee is entitled to SMP (earnings must be above the Lower Earnings Limit) and
      • to establish the rate of SMP.

      The average is calculated by reference to the employee's relevant period. This is based on an eight week period up to the end of the qualifying week. In some instances subsequent pay rises have to be taken into account when calculating SMP. Earnings for this purpose are the same as for Class 1 NIC and include SSP.

      Should your company qualify for Small Employers' Relief
      (SER) you will receive funding for 100% of the SMP payable
      plus 3% NIC compensation. To qualify for SER, the total gross Class 1 NIC for the employee's qualifying tax year must be less than £45,000. The employee's qualifying tax year is the last complete tax year that ends before the start of her qualifying week.

      Alan

      Comment


        #4
        Originally posted by michelle77 View Post
        I am an Employee and Director of a Limited Liability Company and pregnant. I was wondering whether anyone has any experience with statutory maternity pay / SMP? I know that I am eligible for SMP, but I read that Directors often draw artificial bonuses to maximise maternity pay.

        Also, is it correct that I can keep on working for the company (after having the baby) and as long as it is no more than 10 days per months, keep the SMP?

        Thanks a lot!
        You need to look at the weeks that are used to calculate the SMP. In those weeks pay yourself a lot. Say upto £10k over those weeks. This will get you 6 weeks at 90% of this to start off with.

        You cannot continue to work for the company. Now if you answer e-mails etc then that is one thing, turning up and billing days work and expecting to keep SMP is another.

        Comment


          #5
          Originally posted by michelle77 View Post
          I am an Employee and Director of a Limited Liability Company and pregnant. I was wondering whether anyone has any experience with statutory maternity pay / SMP? I know that I am eligible for SMP, but I read that Directors often draw artificial bonuses to maximise maternity pay.

          Also, is it correct that I can keep on working for the company (after having the baby) and as long as it is no more than 10 days per months, keep the SMP?

          Thanks a lot!

          WTAS. And, congratulations!

          Comment


            #6
            Btw you can apply to hmrc to have the stat pay credited to your company in advance

            Comment


              #7
              "SMP is treated as normal pay and taxed accordingly."
              urm... silly question here. If this is the case, what is the point to claim SMP? Most of us draw minimum salary + dividend < £42475.
              So how much will SMP save?

              Comment


                #8
                Originally posted by 7of9 View Post
                "SMP is treated as normal pay and taxed accordingly."
                urm... silly question here. If this is the case, what is the point to claim SMP? Most of us draw minimum salary + dividend < £42475.
                So how much will SMP save?
                The 'saving' is that the pay can be reclaimed from HMRC, in the case of small companies you get a 100% refund, larger companies are refunded 92%

                Alan

                Comment


                  #9
                  Keeping in touch days

                  Originally posted by michelle77 View Post

                  Also, is it correct that I can keep on working for the company (after having the baby) and as long as it is no more than 10 days per months, keep the SMP?

                  Thanks a lot!
                  You can have some days working for the company whilst on maternity leave. They're called 'keeping in touch' days - see below from www.direct.gov.uk

                  Keeping in touch
                  During your leave it is often helpful to keep in touch with your employer.
                  Your employer is entitled to make reasonable contact with you during Statutory Maternity Leave. This might be to update you on any significant changes in the workplace, including any opportunities for promotion or job vacancies.
                  You can work up to ten days' during your Statutory Maternity Leave without losing your Statutory Maternity Pay, Maternity Allowance or ending your leave. These are called keeping in touch days - and may only be worked if both you and your employer agree. You cannot work during compulsory maternity leave which is the two weeks immediately after your child is born.
                  Although particularly useful for things such as training or team events, keeping in touch days may be used for any form of work. They should make it easier for you to return to work after your leave.
                  You will need to agree with your employer what work is to be done on keeping in touch days and how much pay you will receive.
                  Last edited by SarahL2012; 7 September 2012, 16:34. Reason: insert text

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