Maternity leave & SMP

Employed Women:

Pregnant employees are entitled to paid time off for ante-natal care. Eligible employees can take up to 52 weeks of maternity leave. The first 26 weeks is Ordinary Maternity Leave, and the next 26 weeks is Additional Maternity Leave. They can be paid Statutory Maternity Pay (SMP) for up to 39 weeks. The first 6 weeks are paid at 90% of the average weekly earnings, followed by 33 weeks at the statutory rate or 90% of their average weekly earnings, whichever is lower.

Employed parents who lose a child under the age of 18 or have a stillbirth after 24 weeks of pregnancy are entitled to two weeks of statutory Parental Bereavement Leave.

Self-Employed Women:

Self-employed women must cover their time off for ante-natal care, including if they find themselves unexpectedly in hospital ahead of their baby being born (e.g. for hyperemesis gravidarum, or pre-eclampsia), or due to the loss of a baby before 24 weeks of pregnancy (after this is covered by SMA). They are also not entitled to statutory Parental Bereavement Leave.

Statutory Maternity Allowance (SMA) can be paid for those who have paid Class 2 National Insurance contributions for at least 13 of the 66 weeks before their baby is due. This is usually paid for up to 39 weeks at a standard rate, which may be lower than SMP.

If self-employed women claim Maternity Allowance, You can ONLY work for up to 10 days during your Maternity Allowance period without it affecting your payments. These are called Keeping in Touch (KIT) days. Therefore, you must cease involvement in all business activity (including payroll, end-of-year tax returns, VAT payments, recruitment, business management, terminating contracts, sales, networking, etc).

Maternity Pay:

It is worth acknowledging that an issue affecting BOTH employed and self-employed women is how unsustainable and devalued SMP and SMA is considering those claiming it have been contributing to the economy until they require it.

Annual benefit cap for couples with or without children (Greater London) (Divided by 12 to get the monthly amount): £2110.25
National Living Minimum Wage (Average monthly salary for 35 hour week): £1735.06
Monthly maternity allowance (Based on the maximum of £184.03 a week): £797.46

Women would “earn” more than double the amount on benefits.

Did you know?

In the UK there are a total of 611,000 solo self-employed mothers, around half (302,000) of whom are working as freelancers. The number of solo self-employed mothers increased by 61 per cent between 2008 and 2020. (Women in Self Employment Report. IPSE 2020)
Flexibility around family care is the #1 reason to start a business for women with children. (Rose Review of Female Entrepreneurship, HM Treasury 2019)
Earlier studies also found women were nearly five times more likely to mention family reasons for becoming self-employed than men. A fifth of females chose to work as self-employed to help combine ‘family commitments/wanted to work at home’ and employment in a flexible manner. Conversely, men were almost twice as likely to say that one of the reasons they became self-employed was to ‘make more money’ than women. (ONS Regional Trends, Women in Business 2009).

Health, safety &

discrimination

The protections for employed women (PAYE) in the UK during pregnancy and after birth are more robust and comprehensive compared to those for self-employed women.

Health and Safety

Employed Women: Employers must ensure the workplace is safe for pregnant employees. This includes conducting risk assessments and making necessary adjustments.

Self-Employed Women: Self-employed individuals are responsible for their own health and safety. There are no specific workplace protections similar to those required of employers.

Discrimination

Employed Women: Under the Equality Act 2010, it is illegal to discriminate against employees on the grounds of pregnancy, maternity leave, or childbirth. Employees have the right to return to the same job after maternity leave. If that’s not possible, they must be offered a suitable alternative job on similar terms and conditions.

Self-Employed Women: Self-employed women do not have the same protections under employment law against discrimination related to pregnancy and maternity. However, if they work as contractors, they might have some protection depending on the nature of their contractual relationship. These protections are limited though.

Expenses

As a business owner, you are allowed to expense:

Employee salaries and benefits
Professional services
Travel expenses (flights, accommodation, meals)
Marketing and advertising
Training and education
Office supplies and utilities
Software and subscriptions
Equipment and machinery
Business insurance
Client entertainment
Home office expenses

However, you cannot expense anything related to childcare services, even if this is exclusively so you can work.

Important statistics

Women are less likely to attribute closure to ‘business failure’ and more likely to cite ‘personal reasons’ – which peak at age 25-34 for women. (Women in Enterprise: A Different Perspective, RBS Group 2013)
Self-employed women with caring responsibilities, in England and Wales, receive less support than employed women. They return to work more quickly after having children and usually have little or no maternity cover. (Limmer 2012)
Self-employed mothers are not entitled to Statutory Maternity Pay. Instead they can claim a Maternity Allowance (£151.20 per week or 90% of average gross weekly earnings whichever is the smaller amount)and can work up to ten Keeping in Touch (KIT) days to maintain their business. (IPSE 2020)
Only one-third of self-employed mothers take the full 39 week period of Maternity Allowance. (IPSE 2020)

Women are twice as likely as men to mention family responsibilities as a barrier to starting a business. In addition, for female entrepreneurs with children, primary care responsibilities are the #1 barrier to further business success, with 46% of female parent entrepreneurs identifying it as a “very important” or “important” barrier versus 33% of male parents with businesses. (Rose Review of Female Entrepreneurship, HM Treasury 2019)
Maternity can be a particular challenge for women entrepreneurs and small business owners, as the legal framework and protections available for employees do not apply (although the self-employed may be able to claim Maternity Allowance). (Women’s Business Council, Enterprise Evidence Paper, BIS 2012)
Pregnant female entrepreneurs are less likely to plan to take any time off as formal maternity leave. (Rouse 2009)
Enterprise programmes often ignore childcare issues, and that childcare can act as a cause of business failure. (Rouse & Kitching 2006)

At every level of entrepreneurship, women are at least 20% more likely to cite necessity, rather than opportunity as their motivation. (Women’s Entrepreneurship 2016-2017, GEM 2017)
Women cite childcare as a barrier to enterprise, but some analysis suggests that rather than the key issue being the availability of formal childcare, it is often that women want to care for their children themselves. Nonetheless, in much of the research into barriers to economic activity, women cite a lack of affordable childcare provision as a barrier to entry. (Women Returners and Enterprise, Timewise Foundation 2009)
Shared Parental Leave (SPL) legislation came into force across the UK on 5 April 2015. Self-employed parents have been explicitly excluded from this right. (IPSE 2020)

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Together, we can create a future where balancing business and babies is a supported, celebrated, and viable option for all women. Thank you for joining us on this important journey.