Advanced Funded Maternity pay how to process on Sage?

[Alison Jones]

HI

Has anyone ever come across advanced funded Maternity pay? I was told by Inland Revenue that I was not entitled to maternity pay through the business as not enough wages showing on end of year accounts and to apply for maternity allowance through job centre. This would have been so much easier being paid direct by Job Centre, but job centre disputed with Inland Revenue and got told entitled to maternity pay after all and to apply for advanced funded maternity pay.

Received a cheque for 1st November - 5th April and will get another cheque for 6th April - 31st July 2011.

Does anyone know how I account for this on sage, and our end of year accounts is 31st October 2010 for companies house, so the cheque is paid in but all relates to next financial year?

Thanks in advance for the advise on how to process this.

Thanks

Alison

[Scalloway]

It is a receipt in advance so should be shown in the creditors section - codes 2000 to 2999

[Tom McClelland]

I don't quite understand this. Is this Statutory Maternity Pay?

If so the rules concerning whether it is payable or not aren't really a matter for debate or dispute. Either you earned a wage that was above the LEL during the qualifying 8 weeks or you didn't... and whether you did that or not would be a matter of record in the employer's payroll system. I don't understand why the job centre would be involved unless the job centre was paying you at the time, in which case it would be the job centre's responsibility to pay the SMP too, and I don't see why your business would get a funding cheque.

But maybe someone who knows more about employment law and SMP will set me straight. Or perhaps this isn't SMP at all, some other benefit instead.

[MyAccountantOnline]

It does sound rather odd Alison - I'm with Tom on that one I cant understand how/why HMRC and the job centre have become involved?? If you've been running a company payroll you must know if you are entitled to SMP?

[Scalloway]

If you do not qualify for SMP from your employer the Job Centre will pay it.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Expectingorbringingupchildren/DG_10018869

[MyAccountantOnline]

If you do not qualify for SMP from your employer the Job Centre will pay it.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Expectingorbringingupchildren/DG_10018869


But if you run a payroll you must know if you are eligble for SMP and as such able to claim advance funding from HMRC:)

[Tom McClelland]

If you do not qualify for SMP from your employer the Job Centre will pay it.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/BenefitsTaxCreditsAndOtherSupport/Expectingorbringingupchildren/DG_10018869

Maternity Allowance (MA) is not Statutory Maternity Pay (SMP). MA is paid straight to the employee through the benefit system and the employer doesn't get involved at all. Whereas SMP is paid to the employee by the employer, and there are strict rules about what can be paid and the employer then recovers most/all of the payment from HMRC. Advance SMP funding is available where the employer's PAYE/NI bill is insufficient to cover the SMP paid to the employee, but if this isn't SMP then how can that be the case?

[Alison Jones]

It is statutory maternity pay. I did run the payroll and thought I was entitled to it. I telephoned Inland Revenue to find out how to go about applying for it. They asked me to confirm to them what was on our filed accounts, I told them that our year only went to 31st October 2009 but my payslips since January 2010 were £450 a month so above the level. They told me that this was irrelevant and to apply to Job Centre for Maternity Allowance.

Applied to job centre for maternity allowance who referred back to Inland Revenue. Another member of Inland Revenue staff when I queried it said that I was not entitled to maternity pay because did not have a written contract confirming the salary because other Director my hubby and just had a verbal agreement in place.

Then another member of Inland Revenue staff telephoned said it only mattered that I got a salary of £450 in June and £450 in July and to apply for advanced funding for maternity pay. I hope they got it right now.

My question is how to process on sage accounting as never dealt with advanced funding before.

Thanks

Alison

[MyAccountantOnline]

It is statutory maternity pay. I did run the payroll and thought I was entitled to it. I telephoned Inland Revenue to find out how to go about applying for it. They asked me to confirm to them what was on our filed accounts, I told them that our year only went to 31st October 2009 but my payslips since January 2010 were £450 a month so above the level. They told me that this was irrelevant and to apply to Job Centre for Maternity Allowance.

Applied to job centre for maternity allowance who referred back to Inland Revenue. Another member of Inland Revenue staff when I queried it said that I was not entitled to maternity pay because did not have a written contract confirming the salary because other Director my hubby and just had a verbal agreement in place.

Then another member of Inland Revenue staff telephoned said it only mattered that I got a salary of £450 in June and £450 in July and to apply for advanced funding for maternity pay. I hope they got it right now.

My question is how to process on sage accounting as never dealt with advanced funding before.

Thanks

Alison

Hi Alison

Sadly your experience shows how people can get it so wrong from taking 'advice' from HMRC!

Glad you have it all sorted now.

I am no Sage expert but in a set of accounts the advance funding would be a creditor.

[Tom McClelland]

OK, fine, now I understand. Wrong advice from HMRC made you think that you needed MA, but the job centre set you straight and pointed you back at a normal SMP payment.

Filed accounts are completely and utterly irrelevant and I don't understand why HMRC even brought them up. What actually matters for SMP earnings is the actual gross wages that were paid to you in the qualifying 8 week period. Since that was £450/month you're entitled to SMP. Simples. (I'm afraid I can't help you with you actual question, it was just the background to it that confused me)

[MyAccountantOnline]

Filed accounts are completely and utterly irrelevant and I don't understand why HMRC even brought them up.

Its frightening that HMRC give 'advice' like this but sadly so typical.

[David Griffiths]

The way that it's treated in Sage will depend how you treat the SMP payments. I would expect the recoverable SMP payments to be posted to the PAYE/NI control (Iwould expect this to be a single account even though the standard Sage charge insists on giving two account numbers) where they would normally be set against the monthly payment to HMRC. In that case, I would credit the advance funding to that account.

[Scalloway]

My question is how to process on sage accounting as never dealt with advanced funding before.

Thanks

Alison

See my post above. Debit the creditor account as you pay it out.