Can I do a contracting job during maternity leave?

I am a teacher and I will be commencing maternity leave this month. I also do contracting work and have done since 2022.I have been offered another contract during my maternity leave and I am struggling to find out whether this will interfere with my SMP. I am employed as a ‘contractor’ and pay tax through PAYE. I am paid according to the quantity of work I do. I do not want to risk accepting the contract if it means that I will stop receiving SMP so near to the start of my maternity leave. Please can you help?

teacher's desk with books apple and colours

 

Congratulations on your pregnancy. You are right to be cautious in relation to this as the rules relating to statutory maternity pay (SMP) are complicated where you carry out work for more than one organisation. .

The starting point is that once your child is born and you have started maternity leave, if you then commence employed work with a new employer, your entitlement to SMP will cease. In this scenario you will have no right to SMP in the week in which you start the new job or in any subsequent week and your right to SMP will not resume even if you leave that new employment. This is specifically confirmed in the legislation surrounding maternity pay.

The exception to this rule is that any self-employed work you undertake for another organisation during your SMP period has no effect on your entitlement to SMP. This is because the legislation only applies to work that you commence with another “employer”. If your work as a contractor is treated as genuine self-employment, it therefore would not interfere with your right to SMP. If, however, they are treated as your “employer”, undertaking this work would effectively extinguish your SMP entitlement.

When deciding whether the second organisation is your employer or not, an employer is defined as anyone liable to pay class 1 national insurance contributions, which are usually only payable in respect of employees and employed earners. You mention that the employer has historically taken tax through PAYE which suggests that this is likely to be treated as employment, rather than genuine self-employment. However, I recommend that you check your payslips to establish whether national insurance deductions have been made from the previous payments you have received and check how your status is formally treated for tax purposes as a starting point. If you can establish that this is genuine self-employment you could rely on this exception.

For completeness, the only other exception to this rule that may apply to you is that there are different rules where you are employed by two employers during the qualifying week for SMP – which is the 15th week before your expected week of childbirth. In this situation, if your second employer is not liable for SMP, for example, because of your level of earnings, you may return to work for that employer without affecting your right to SMP from your main employer. If you have an ongoing contract through your contracting job, which was in place at the 15th week before your expected week of childbirth, this is something that you could explore in the alternative.

You may also find it helpful to contact the HMRC Employee Helpline on 0845 302 1479 to discus your specific situation if you are unsure as to how the work with the exam board will be treated.

*Charlotte Farrell and Tabytha Cunningham are Partners at Paris Smith in Southampton.



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