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Unfortunately, many self-employed people have been sold the myth that they won’t be eligible for any financial support, and that only employees receive the benefit of maternity pay. This simply isn’t true - you’ve got a couple of different options here…
About us.
Hi, welcome to Mystyle 👋 we’re a female-led accountancy firm founded in 2023 by Rubie, after recognising the lack of support for female founders.
"Women would come to me overwhelmed, saying that being a business owner scared them - navigating the world of self employment wasn’t transparent and felt very male dominated".
That’s where we come in - on a mission to help our female founders thrive, you’ll not only have a dedicated accountant for personalised one-to-one support, but also unlock a wealth of free resources to help you get started and succeed.
Today's topic.
In this article, we’ll explore everything you need to know about maternity support for self-employed people - we’ll be covering finances, time off work, and, most importantly, how to effectively get all this in place. Let’s dive in!
Financial support.
Unfortunately, many self-employed people have been sold the myth that they won’t be eligible for any financial support, and that only employees receive the benefit of maternity pay. This simply isn’t true - you’ve got a couple of different options here…
Statutory Maternity Pay
If you’re a Director of your own limited company, you may be entitled to claim Statutory Maternity Pay (SMP), in the same way that an employee is. SMP entitles you to the following:
90% of your average weekly earnings (before tax) for the first 6 weeks
£184.03 or 90% of your average weekly earnings (whichever is lower) for the next 33 weeks
You can claim this if, by the 15th week before your due date, you have been employed by your company and taking a salary via payroll for at least 26 weeks.
To receive SMP, we’d process payroll as normal, and then reclaim the money from HMRC.
...but I can't afford to pay myself SMP in the first place!
Many people find that they aren’t in a position to pay themselves maternity pay whilst they are on leave and then have to wait for HMRC’s reimbursement. Not to worry though, as we can apply to HMRC to receive this money in advance.
Maternity Allowance.
If you’re not entitled to SMP, you’ll likely be eligible for Maternity Allowance (MA) instead. This will be the case if you are a sole trader or if you are a limited company director who hasn't been processing payroll for the specified time period above.
With MA, you can get between £27 to £184.03 a week for up to 39 weeks.
To be eligible for the full rate of MA, you need to have paid class 2 national insurance for at least 13 of the 66 weeks before your baby’s due date.
Once you’ve submitted your MA claim, the Department for Work & Pensions will check whether you’ve made enough class 2 national insurance contributions to be eligible.
You should be able to check your HMRC online account to see how much you’ve paid but, if there is any shortfall, HMRC will typically contact you specifying the amount you need to pay in order to get the full rate of MA. This amount will be deducted from your overall tax liability for the tax year it relates to, so you won’t be overpaying national insurance.
How can I claim Statutory Maternity Pay?
To claim SMP, you’ll need to do this directly via your payroll software using an Employer Payment Summary.
(Psst - payroll filings are quite particular so we recommend leaving this in the hands of a professional).
...and what about claiming Maternity Allowance?
Our experts can help with this, although the process is a bit simpler compared to claiming SMP. To claim MA, you’ll need to fill in form MA1 which is available on HMRC’s website, together with guidance notes. (TOP TIP - the form frequently refers to a 'test period' - you can use HMRC's calculator here to work this out).
You can submit your claim from your 26th week of pregnancy - we’d recommend doing this ASAP to give you enough time to top up any shortfall in national insurance, if required.
How long can I take off work?
You can receive SMP or MA for up to 39 weeks. However, if you plan on taking a shorter amount of time off work, your payments will be adjusted to reflect this.
You'll be entitled to 10 ‘keep in touch’ days in which you can work during your time off, whilst still receiving SMP or MA payments. These keep in touch days are fully flexible, for example, you could work one day per week for 10 weeks, or work consecutively for 10 days.
Final thoughts.
Ultimately, don’t be put off starting a business due to the common misconception that self-employed people aren’t entitled to anything. As explored above, this simply isn’t true.
Our experts are readily available to help navigate this process for you so please don’t hesitate to reach out to us.
*The information above is correct at the time of posting and is not financial advice nor is it personalised to your situation. If you are looking for personalised advice, please contact us.