‘HMRC delays mean my baby was nine months old and I still hadn’t been reimbursed for maternity leave’
- HMRC reimburses statutory maternity leave for self-employed business owners
- But one woman waited for months for the tax collector to send her this money.
- HMRC finally sent him a misprinted check, which he had to return
When it comes to running your own business, entrepreneurs face many obstacles along the way.
Becci Nibelle, founder of craft kit company Ellbie Co, didn’t anticipate that having a baby would be one of them.
Maternity pay for business owners can be quite complicated. Employers can offer statutory maternity pay, which is the legal minimum that can be paid, or contractual maternity pay, which is a different amount usually outlined in the contract.
There is also a government payment called maternity benefit that you can claim for taking time off work to have a baby.
Another blunder: HMRC left small business owner Becci Nibelle waiting months for her maternity pay to be refunded.
With statutory maternity benefit, if you run a limited company as sole director, you take on the role of both employer and employee.
Are you a small business that has had a problem with HMRC? Get in touch: email@example.com
As a director, you are likely to receive a small salary and dividends from the company, meaning there may be little or no liability to HM Revenue & Customs (HMRC) each month.
In that case, the monthly maternity payment is claimed each month and the credit will accumulate in your account. This can be claimed once the tax year has ended.
For Nibelle, who applied as a solo business manager without employees, the situation was difficult and she could only afford to be away from work for about two months while she was pregnant.
She had to pay maternity pay herself before claiming the money from HMRC once she submitted her year-end accounts in April.
Nibelle said: ‘You are not allowed to work in the business beyond 10 days of “keeping in touch”.
‘So you don’t get any income because you can’t really work. But then, because you don’t receive an income, you’re still expected to pay yourself the maternity money and then claim it at the end.’
You shouldn’t have to fight for something that is meant to help you during one of your most vulnerable times.
‘I felt pressured to complete only two months of motherhood. Then I had to come back, put my baby on my chest, and work, because I can’t afford to pay someone to take care of him. Likewise, I couldn’t just sit back and watch my business slowly die. I needed an income.’
After waiting four months for a refund, he finally received a check with no updates from the taxman.
“I’ve been constantly chasing, my accountant has been chasing,” Nibelle said. “You shouldn’t have to fight for something that is meant to help you during one of your most vulnerable times.”
While Becci thought the check might be the end of the story, the bank would not accept it because it had been printed incorrectly.
At the time, her son was almost nine months old.
Becci Nibelle, founder of Ellbie Co, waited months for her maternity pay to be returned
Becci was forced to chase the tax collector again. As we have documented in recent months, it has become increasingly difficult to contact HMRC, largely because it closed its self-assessment helpline over the summer.
Statistics show that customer service has worsened since the start of the pandemic.
Nibelle was on hold for an hour before being told she had to send the misprinted check to the taxman with her bank details. HMRC said she would pay him within three weeks.
“I went all the way to Brighton with my little baby to pay the cheque, which is no small feat,” Nibelle said. ‘To be turned down and have all that stress again…why couldn’t they refund my money right away?’
This Is Money contacted HMRC to ask what had happened to Nibelle’s payment and why she was forced to return the misprinted cheque.
The tax collector says he processed the application in May and issued a check, as requested by his accountant, in July.
HMRC says that to “protect public funds” it requests that misprinted checks be returned so that it can cancel the check and ensure no funds are deposited before issuing a new payment.
Fortunately, the check has since been canceled and the refund was made to Nibelle via bank transfer in mid-September.
An HMRC spokesperson said: ‘We apologize to Ms Nibelle for the delay. Alternative payment details have been provided and the refund has been processed.’