Statutory Maternity Pay & Two Employments
Q: I have recently become pregnant and I am currently employed in two part time jobs. Am I entitled to maternity pay and leave from both employers? How much will I receive?
A: To qualify for Statutory Maternity Pay (SMP) and maternity leave then you must have been employed by the same employer continuously for at least 26 weeks into the 15th week before the week your baby is due (the qualifying week).
You also must have earned at least £97 per week on average for the eight weeks prior to the fifteenth week before the baby is due.
Therefore, provided that you have worked concurrently for each employer for at least twenty six weeks prior to the qualifying date of the 15th week before the baby is due then you will be able to claim from each employer.
The amount you receive depends on the amount you earn from each job. The first six weeks will be paid at 90% of your average earnings for the eight weeks prior to confinement. The remaining 33 weeks will be paid at 90% of your average earnings as above or at the rate of £124.88 per week, whichever is the lower.
Goods Taken for Own Use
Q: We run a lighting shop and have taken delivery of some lamps that my spouse really likes. A friend of mine in the trade said it would be alright to just pay into the business the cost price of the lamps, is it alright to do this?
A: Regrettably you friend is wrong.
On any goods or items from stock that you remove for your own use you will have to account to the business for the full selling price and assuming that you are VAT registered, the VAT applicable to the sale.
Recovering VAT on Purchases before Registration
Q: I recently registered my small retail outlet for VAT and read that I am able to reclaim all of the input VAT on goods I purchased (and subsequently sold) when I first started trading two years ago? Is this possible?
A: Unfortunately not, you can only claim back the VAT on goods that you have acquired in the 3 years prior to registration which are still held in stock (or used to make other goods which are still held in stock) and originally acquired for the business purposes. This also includes VAT incurred on fixed assets you still use in your business.
You can also recover the vat incurred on services, which have been supplied within 6 months prior to becoming registered, assuming they were also supplied for the purpose of the business. Therefore, any VAT suffered on goods which have been sold on to customers cannot be re-claimed.
To reclaim VAT on these items you need to include the claim on your first VAT return. You should also carry out a careful stock check and record the quantities of goods and the dates when you obtained them. This will form the basis of the records you need to keep to validate your claim.
Lloyd Stubbs in Grantham specialises in managing tax and accountancy affairs for small business owners and can be contacted by phone or email
Disclaimer – advice shared in this column is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this column, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
September 2010 Q&A