Statutory Maternity Pay query

Model500 Registered Posts: 43 Regular contributor ⭐
I have a relatively new client who is a sole director of her own limited company (with no other employees) but has for the past year been subject to IR35 while working for HMRC as a contractor, and therefore has been having her PAYE operated by an Umbrella company during the current tax year, rather than basic directors renumeration etc. She is due to have a baby shortly and has asked if she would be entitled to any Statutory Maternity pay.

It is my understanding that sole directors of ltd companies with no employees are are not generally entitled to Statutory Maternity Pay as they have no means of providing an ongoing service during maternity leave and would therefore be directed to apply for Maternity Allowance instead.

However, as it this is not an entirely straightforward case, due to the IR35 situation, I am struggling to find guidance that applies to her specific circumstances.

Does the IR35 situation deem her more of an 'employee' and therefore entitled to SMP?

I have never encountered this before and therefore, before I respond to my client, any guidance from more experienced members would be much appreciated.



  • reader
    reader Registered Posts: 1,037 Beyond epic contributor 🧙‍♂️
    I think you are a little confused on 2 points:

    1) Your client is an employee of the umbrella company. IR35 is irrelevant for employees (it only affects contractors rather than employees). Therefore, like any employee, if she has been employed for long enough and earned enough money she will be entitled to SMP like any other employee. Therefore she should go back to the umbrella company and ask them if she qualifies. If not, they will give her an SMP1 and she can claim maternity allowance.

    2) Sole directors of limited companies can apply to HMRC for maternity pay for their own company. Again, as stated above, it just depends on whether she has been on her company's payroll for long enough and earned enough money. You should be able to determine whether or not she qualifies for SMP from her company, and the umbrella company should be able to determine whether or not she qualifies with them.

    Have you looked up the qualifying conditions for SMP?

    Does your practising certificate licence you for payroll services?
  • Model500
    Model500 Registered Posts: 43 Regular contributor ⭐
    Thanks for pointing me in the right direction reader ;-)

    I can't remember without digging out my reading notes where I read the bit about sole directors with no employees not being able to claim SMP but from reading your response, that would be incorrect and I will strike that particular website off my reading list.

    I did look up the SMP qualifying conditions but as you so politely put it I got a 'little confused' over the issue of a Director contracting via an Umbrella company hence seeking guidance on this forum. Having read your response I think I convinced myself my clients SMP situation would be more complicated than it actually is.

    I am licensed for payroll services but I only provide this service to a handful of clients who in turn only have, at most, a handful of employees. Fairly straightforward PAYE / Auto Enrolment stuff really. I only operate at a level I feel confident in and where a new set of circumstances occur I always seek guidance / training (and record as CPD) or, if necessary, redirect to other service providers but nevertheless thank you for your concern.

    My Continuation of Practice agent (local firm of Chartered Accountants) also provides me with guidance when asked but I like to (and record as CPD) carry out my own research before bothering them.

    Thank you once again for your quick response to my query and steering me in the right direction. :-)

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