Could you please advice on Maternity Leave Policy?

[rayb]

I have been working for the same company for more than a year since I came to UK. I am a contractor via agency with my own Ltd. I am three months pregnant. I don’t know what is going to happen financially when I take Maternity Leave.

I checked with HR, I am not entitled to Statutory Pay via Company or Agency, as I do not work for them directly and I am not entitled to Maternity Allowance as I am not self employed.

Could you please advice on Maternity Leave Policy for contractors like me?

[Dawie]

Why would you be entitled to anything? You're a contractor.

Surely you knew what the deal was when you started contracting? As a contractor you are entitled to nothing, zip, nada, not a sausage. No sick leave, no maternity leave, no holidays. You are supposed to make provision for yourself as a contractor, that's the deal.

So, the short answer is: there is no maternity leave policy for contractors, because contractors don't get maternity leave!

[rayb]

contractors do have a right for maternity leave for the same period of time as staff and have a right to return to work. But they dont get money during leave...
well I paid substantial tax and two types of NI, thats why I expected £112 a week of maternity leave pay.

is there any positive advice, anyone?

[VictoriaS]

People on spousal visas/FLR/Leave to enter/people not considered settled for the purpose of the immigration rules are entitled to contributory benefits, which are NOT public funds, although some may depend on the amount of NI contributions made.

This document is from 2005, but I believe it is still accurate

http://www.bia.homeoffice.gov.uk/siteco ... iew=Binary

So, statutory maternity pay would not be considered a public fund.

Maternity Allowance is only paid to those who do not qualify for SMP. It is also a contributory benefit, so you have to have been working for a certain amount of time in the UK or a country with a reciprocal agreement to qualify. It is also not a public fund. This page might help:

http://search2.openobjects.com/kbroker/ ... +allowance

Hope this helps.


Victoria

[rayb]

Thanks Victoria. I checked these before, I am not entitled to it not because of immigration status but because of Ltd employment status.

[Dawie]

contractors do have a right for maternity leave for the same period of time as staff and have a right to return to work. But they dont get money during leave...
well I paid substantial tax and two types of NI, thats why I expected £112 a week of maternity leave pay.

is there any positive advice, anyone?

There is no concept of "maternity leave" for contractors, as, strictly speaking, contractors work for themselves. If, as a contractor, you want maternity leave, you just simply stop working.

Contractors do not have a right to return to work, if they did, they would not be contractors. Contractors work for a fixed amount of time at a set rate determined by a contract. They work for themselves through their limited companies. As such the client they work for is under no obligation to give them leave or sick pay, as the contractor is not an employee of theirs. When your contract is is finished, the client is also under no obligation to provide you with more work.

If you want paid maternity leave as a contractor, then you are free to pay yourself if you want, although this would be nonsensical.

This topic should be moved, as it's not immigration related.

[VictoriaS]

Perhaps moved, not deleted.

[VictoriaS]

Thanks Victoria. I checked these before, I am not entitled to it not because of immigration status but because of Ltd employment status.

The self employed are entitled to MA if you have made enough contributions.

Employment rule
You must have been employed and/or self-employed for at least 26 weeks in your 66 week test period. The 26 weeks do not have to be in a row and it does not matter how much you earn.You do not have to be actually physically at work to be employed or self-employed; you might be off work sick for example.

Weeks when you have not worked a full week count towards your 26 weeks.
If you are self-employed, you must register as such with the HM Revenue & Customs according to their rules.



Victoria

[Dawie]

Perhaps moved, not deleted.

Err....that's what I said...

[Dawie]

Thanks Victoria. I checked these before, I am not entitled to it not because of immigration status but because of Ltd employment status.

The self employed are entitled to MA if you have made enough contributions.

Employment rule
You must have been employed and/or self-employed for at least 26 weeks in your 66 week test period. The 26 weeks do not have to be in a row and it does not matter how much you earn.You do not have to be actually physically at work to be employed or self-employed; you might be off work sick for example.

Weeks when you have not worked a full week count towards your 26 weeks.
If you are self-employed, you must register as such with the HM Revenue & Customs according to their rules.



Victoria

As a solicitor I would expect you to know that being self-employed, and being a director of a limited company are NOT the same thing for tax purposes.

[VictoriaS]

Er....I don't understand the relevance of this. And I'm not a solicitor. But I am a self-employed woman who follows this issues VERY closely, so if I have missed something, please let me know, as if it turns out that I will NEVER qualify for MA then I may as well stop paying NI!


Victoria

[Dawie]

Sorry Victoria didn't mean to accuse you of being a solicitor!

What I mean is the following:

Many contractors choose to operate through a limited company. As such, they become directors of their own limited companies, invoice their clients and obtain payment through their limited companies. They then pay themselves a small PAYE salary, and the rest in dividends which are tax-free up to a certain amount (more or less £38000 per year at the moment). They generally pay no national insurance contributions. The only tax they pay is the 20% companies tax levied on the net income of their limited company.

Alternatively, contractors can choose to contract in their own names as self-employed individuals. These individuals pay Class 2 and Class 4 national insurance contributions and are taxed on a self-assessment basis through a personal income tax return each year using the same marginal tax rates that normal PAYE employees use.

The point I'm trying to make is that the OP has chosen to contract herself as the director of a limited company. There is a good chance that she has paid little or no national insurance contributions during her time as a contractor and therefore might not be entitled to MA if her national insurance contributions have been minimal or not kept "topped up".

One thing is certain though, she is not entitled to maternity pay from her employer, because technically her employer is herself. MA from the government is another matter.

[hsmpwpilr]

OP has 2 options:

1. Pay herself SMP through her own limited company. The limited company can claim SMP compensation from HMRC later.
2. If OP is paying herself atleast minimum wage while working as a director, she could quit the limited company prior to 15 weeks before the baby is due. This way OP will not qualify for SMP and she could claim MA.

[VictoriaS]

Sorry Victoria didn't mean to accuse you of being a solicitor!

I should think so...I find the accusation quite offensive!



As to your other points, I guess whether or not she can get MA is dependent on whether or not she has kept up her voluntary class 2 contributions (as I have, just incase!).

Victoria

[OFCHARITY]

Paying herself SMP through her limited company may be the best option, she should then be able to claim this back from HMRC.

"Employers can recover 92 per cent of SMP payments but if your total National Insurance payments are £45,000 per year or less you can recover 104.5 per cent to cover SMP payments, and in compensation for some of the employers' National Insurance paid on SMP. You can recover SMP by deducting it from payments you make to HM Revenue & Customs (HMRC) for PAYE (Pay As You Earn) and National Insurance. You can also get funding in advance for payments of SMP from HMRC" ... this according to the governments business link website.

You can call the new employers helpline and ask to speak to someone who can advise you on rules relating to directors.

New Employers Helpline - 0845 60 70 143
Mon – Fri 8am – 8pm
Sat – Sun 8am – 5pm
Textphone - 0845 602 1380 (for employers who are deaf or hard of hearing)

The link below gives guidance as to what you are entitled to as an employee (even though you own the company you are also an employee of the company);

http://www.dwp.gov.uk/lifeevent/benefit ... ty_pay.asp

This link gives guidance as to what to do when you are acting from the point of view as the employer (i.e. the director of your company)
http://www.businesslink.gov.uk/bdotg/ac ... 926&r.s=sc

[/b]

[rayb]

I did pay two types NI every month (employer NI & employee NI), but they are not Class 2 NI, I checked with my accountant. As director of my Ltd I am not self-employed or sole trader and not supposed to be paying Class 2 NI.

DWP site said that if I am not entitled to SMP or MA, then I can claim Incapacity Benefit (which is not in list of Public Funds). But when I read Incapacity Benefit guide I found nothing about maternity payments, only illness/disability.

I will ask my accountant about paying SMP via my LTD and claiming it back from HMRC. Good idea, thanks.

This discrimination is a bit strange for me to discover in a wealthy & "just" society; in my so called developing country small maternity payments + big lump sum is paid to every pregnant woman by government, whether she is contractor or staff or unemployed. Staff would get up to half of their salaries for 6 months (depending on company policy) on top of statutory payments + bonus to come back to work. But we dont have paternity leave...

Thanks everyone for your inputs. This is very helpful.

[paulp]

To be fair, contractors here are paid a much higher rate so that they can cover their illness/maternity themselves. It's up to you to pay your social contributions and that determines how much you get back, such as contributory maternity pay.

[Siggi]

Paul,
I would agree with you and Dawie on this one contractors are paid well over the odds, for exatly the reason the OP wants to claim for.
No other country in the world would ever pay MP to a contarctor.

[Wanderer]

Agreed, I'm a contractor and I know the score.

I took the wodge and I know I'm entitled to very little, that's it.