Maternity pay advice for the self-employed

Question: I am currently self-employed and have just found out that I am pregnant. I know that if I was employed, I may be entitled to maternity pay but is there something that I can claim instead? From Mrs W of Bexhill

Answer:Yes, there is.

Maternity Allowance (MA) is usually paid to someone who does not qualify for Statutory Maternity Pay (SMP). Reasons that you do not qualify for SMP could be that you are employed but do not meet the required conditions or, as in your case, you are self-employed.

You may be able to claim Maternity Allowance for 39 weeks if you have been employed or self-employed for at least 26 weeks in the 66 weeks before the week you expect to have your baby. A timeline may help here! This 66 week period is referred to as the ‘Test Period’.

For 13 weeks during your Test Period, your average gross weekly earnings must be at least £30 a week. As long as you have been registered as self-employed for at least 26 weeks during the Test Period, this will be deemed to be the case. If you were employed, the 13 weeks in which you earned the most would be used to calculate the average weekly earnings. These 13 weeks would not have to be consecutive.

If you are registered as self-employed and pay Class 2 National Insurance (NI), you could be entitled to £139.58 per week (2016/17) for up to 39 weeks.

If you do not pay Class 2 NI because your profits are less than £5,965 a year (2016/17), you may be entitled to £27 a week.

Anyone who is self-employed is required by law to register their self-employment with H M Revenue & Customs. If you have not registered your self-employment or you register late, you may lose all or some of your Maternity Allowance.

Assuming that you are registered as self-employed with H M Revenue & Customs, the earliest that you will be able to claim the allowance is at the start of the 14th week before the week your baby is due. You should make a claim as soon as you can after this date even if you haven’t stopped working, as claiming more than 3 months after this date will result in you losing money. The Department of Work and Pensions (DWP) will contact you later on to find out the date when you intend to stop work.

A Maternity Allowance claim form (MA1) can be download from the www.gov.uk website. This form should not be dated and signed earlier that the 14th week before the week your baby is due.

Advice

If you would like to discuss your circumstances in greater detail, Ashdown Hurrey can advise on this matter in addition to other tax, accountancy and business matters. Contact Martin Copland on 01424 720222 or email him at martinc@ashdownhurrey.co.uk.