Running own company - any advice?

alliumali

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I've been self employed for years but 2 years ago was advised to become a limited company so I'm now employed by my own company although my income is still relatively low. Has anyone been in this situation? I'm hoping I'll be eligible for maternity allowance.

Also, I'm wondering whether you are allowed to do any work whilst on maternity allowance. My partner is self employed and has a very low income so I'm not sure if I'll survive on maternity allowance alone.

My baby is due at the end of April.

Would be very grateful for any advice.
 
I will try and answer your query. I run my own business and had a baby 12 weeks ago so looked into this sitution with my accountant. As you are a limited company you are an employee and should be entitled to maternity pay. The basic maternity pay is paid to you by the company and then the company reclaim it from HMRC. Your company can choose to pay you more money than the basic maternity pay rate but you the company would not be able to claim that back.

Maternity allowance is different to maternity pay and is paid to indiviudals that do not usually qualify for maternity pay. As my company is not limited, I am not considered an employee, got not maternity pay from my company but was entitled to maternity allowance, paid directly to me from HMRC.

Working while you claim maternity pay or maternity allowance will affect your maternity pay/allowance. You are allowed 10 keeping in touch days with your employer and can be paid for these before it affects your maternity pay/allowance. After that, any work you are paid for should be declared and will be deducted from your maternity pay/allowance. There is some good info on the HMRC website. Try this page for info http://www.hmrc.gov.uk/employers/smp-faq.htm
 
Thank you so much for your advice. I almost wish I hadn't made the transition to becoming a limited company - life seemed so much simpler when I was clearly self employed rather than my own employee!

However, it sounds as if I shouldn't be any worse off if the company can reclaim the maternity pay from the government anyway.

I'd be interested to know now that you're baby is 12 weeks, would you have found it possible to say, do an hour or so of admin work at a home office after the first 4 weeks? I'm trying to anticipate whether to try to keep a couple of my contracts ticking over or whether I should have a clear break for 3 months or so.

Hope it's all going well for you, must be a very exciting time. :D
 
Dear Alliumali,

Don't worry about being a limited company. Our company accountant wishes I had spoken with her before getting pregnant about being a limited company because of the slight financial benefit to me (without impacting negatively upon the company).

I am not sure what to advise you about doing some admin work but I can share with you what I have done and felt over the last 12 weeks having my own business to run. I work as a nurse in my own business and have 2 fantastic nurses covering my clinic 3 days a week and and administrator that is also fantastic working 5 days a week (she worked full time with me before I was pregnant). The 3 of them have been real troupers and definately enabled me to have as much time away from my business as possible. I got as organised as possible in the months before my due date. Did things like stocked the clinic well, ran payroll in advance of people getting paid, had detailed lists and dates of anything that needed done. I imagined worst case scenario in that for a full month I might well be out of action and needed to have things like payroll sorted. Just as well I did as I ended up practically housebound due to severe SPD and induced because of it. I ended up being sectioned (I had wanted a vaginal birth with early discharge after 6 hours!) I had a baby that could not breast feed due to a stiff neck and spent 3 weeks expressing milk, giving it to her by bottle whilst also trying to get her to latch on. After 3 weeks she eventually managed to breast feed.

I don't mean to waffle on but the point I am trying to make is to be prepared for the unexpected and be prepared to have to be involved in your company (unless yours is one that you can abolutely stand back from). The girls in clinic and my husband have all been fantastic but it was immensly difficult at times and could have been even harder had the staff at the clinic been more demanding on my time. Before the birth I was quite prepared to be called and contacted for problems as at the end of the day it is my business to keep going. After the birth, what I was not prepared for was the resentment I felt when I had to deal with anything related to the business as it took time away from my daughter - even if it was only for a few minutes. Two weeks after having her I had to physically go into my business to sort out complete nonsense (staff parking permits and our email just to mention 2 problems) which reduced me to tears just because of the whole effort it took to sort out me and the baby. I also had, for the first time in 4 years, a member of staff go genuinely sick 4 hours before her evening shift when the baby was not even 6 weeks old. I had no option other than to go to the clinic and work her shift (husband and baby in tow).

There have been times when I really wished I was an employee in a random company and did not have to answer the phone, sort out problems or devote any time at all to the company. Your business may be very different and you may not need to devote time to it.

Back to your original question! Can I now sit down for an hour and do the admin? Yes - if she is asleep in the pram or hubbie takes her out for an hour or two. Do I want to do it? No. We have all survived it but at the time it was very stressful. All I wanted to do was spend time with my daughter and hated being distracted, even if it was only for a few minutes. Thats a few more minutes I could have sat and gazed at her in wonder. I am 'properly' back at work, on the rota, in February when she will be 6 months old and am glad I have decided to wait until then and not go back after 3 months which would be now. The last 12 weeks really have gone fast and it is so true that you don't get this time with them again.

If you want to ask anything else please do. I wish I had known a business woman that had gone through having a first baby whilst running their own business. Running your own business can be very stressful without the wonderful, but life changing event of having a baby.
 
Dear Clare

Thanks so much for taking the time to share your experience. I'm sorry not to have replied sooner. Work's pretty busy at the moment and by the time I've cooked supper I'm fit for nothing but bed.

You've certainly given me food for thought in terms of being realistic about not only what I might be capable of doing once the baby arrives but also about what I might prefer to be doing. I'm a garden designer so I'm lucky in that my work is pretty flexible and I do have a good supportive team too. I have a contract to manage the ongoing maintenance and development of a large estate so I think I may try to keep that going but try not to take on any new design work for 6 months or so.

The nature of your business certainly sounds more demanding in that your clients would expect the momentum to be maintained. It seems that you're having a lovely time with your baby too though. It is good to hear positive reports about how wonderous a time it can as so many people just seem to go on about how exhausting it is.

Hope you have a great time together over the next 3 months.
:D
 
HI,

I've just read your post about being a limited company and needing maternity pay.

I also work as a limited company having been advised to do this 3 years ago (not sure it was the best advice in retrospect)... I am the only employee and have a modest income so that there is generally not a lot left in my business a/c at any one time.

I'm expecting my baby at the end of March and have been trying to find out what I am entitled to, so far without success. My accountant told me I do not qualify for SMP as I don't earn enough and she said to apply for maternity allowance. However, I found out today that as a limited compnay, I don't qualify for MA either. Nor would I get incapacity benefit or income support. Not good news. :(

Obviously I am quite confused and was just wondering whether you had made any headway?

Regards, Laura
 
I eventually found out from Inland Revenue (calling them for advice from an employer's point of view) that I would have to pay myself maternity pay at around £112 a week or 90% of my salary, whichever was the lower. This can then be reclaimed from the government. As I was only paying myself around £430 a month, taking the rest as dividends, my accountant advised me to raise my salary to around £600 a month as of 1st December so that I would be entitled to the full £112. Your salary is calculated at a qualifying period at a certain point quite a long time before the baby is due. Mine is due 18 April and my qualifying period I think was sometime in November. It may be too late for you but perhaps it's worth asking your accountant to see if she can do anything.

I was under the impression however that if you don't qualify for SMP you should be entitled to MA. It doesn't seem fair that you wouldn't get either!

Good luck, I hope you can sort it out.
 
Hi Laura,

Have you called the inland revenue employer line and spoken with them about paying an employee (you) maternity pay. I am not sure what the actual criteria for determining smp is but they should be able to tell you. I have also put a link to the SMP calculator page on the HMRC site.
http://www.hmrc.gov.uk/calcs/smp.htm

If you cannot get SMP, are you not entitled to maternity allowance? If you have paid enough NI contributions, then you may qualify for mat allowance if SMP if out of the question.

Good luck,

Clare
 
Hi girls,

Thanks for the advice!

I went to see my accountant today and we've decided to use my accounts from last year which end on the 31st Jan 08 rather than the previous year which she had used to calculate with before - I didn't pay enough salary to qualify for SMP in that year apparently. Therefore, in my most recent accounts (yet to be completed of course!), I'll pay myself more salary in order to qualify. The only downside is that I've got to get the accounts done pronto in feb as I'm planning to start mat leave at the end of feb...

Still all a bit tricky but definately more positive than before!

Good luck with the new additions this year!!

Laura

BTW, sorry if the above doesn't make a whole lot of sense, it's clear as mud to me really...I'm not financially minded!
 

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