Coronavirus: ‘I’m being penalised because I took maternity leave’

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Like many people, self-employed confidence coach Lucy Baker found that when the coronavirus hit, her work suddenly had to stop.

Lucy Baker and her babyImage copyright Lucy Baker
Image caption Lucy Baker took six months off when her baby was born in 2018

“I haven’t earned a penny for over six weeks,” she says. “I had events booked in, and one-to-one coaching sessions planned, but it all dissolved, virtually overnight.”

When she heard the chancellor’s announcement that those working for themselves would receive financial support, she was hopeful.

But soon she began to wonder what it would mean for her, as she had taken six months off when her baby was born in 2018.

Under the Self-employment Income Support Scheme (SEISS)

, the government will pay self-employed people grants of 80% of their average profits, up to £2,500, for three months.

The average profits are calculated based on the business’ last three years of tax returns – but the time taken off for maternity leave during that period isn’t discounted, so it brings the average down.

“When you knuckle down to the details, it’s pretty disappointing,” she says. “It feels like something they just haven’t thought of, and I feel like I’m being penalized for having time off to have a baby.”

The SEISS was unveiled by Chancellor Rishi Sunak last month, days after wage subsidies of 80% for salaried workers were announced. The first payments are expected to arrive in people’s bank accounts directly from HMRC in June.

It’s open to anyone earning profits up to £50,000 a year, which is thought to include up to 3.8 million of the five million people in the UK who are registered as self-employed.

At the time, the chancellor said that coming up with a workable scheme had been “difficult” because the self-employed were a “diverse population”.

He acknowledged that some people – like those who had only recently become self-employed – would miss out, but has stressed that 95% of people who are self-employed will be covered by the scheme.

While the grants have been welcomed, sports therapist Kirstie Bridgwater from Tavistock in Devon feels like the timing is particularly bad for her.

She’s been self-employed for 15 years, working in hotels and with sports teams as well as running her own clinic. But she was on maternity leave in two of the last three tax years – so her average profit will come in much lower than a typical working month.

“I know it was my choice to have children,” she says, “but no one expected this.”

With her youngest daughter due to start nursery, she was about to increase her hours again after working part-time. “I’m getting really concerned because I think mine could be one of the last professions to be able to return safely to work. It’s a very worrying time financially.”

She says she’d like the government to look at a business over a longer period of time to establish what an average income would be.

“If they looked at the last 10 years, they’d see that the last three years were not normal for me,” she says. “Lots of mums are self-employed – and with a young family to care for, we need support more than ever.”

Media playback is unsupported on your device

Media captionCoronavirus: Should maternity and paternity leave be extended?

Campaigners say the issue of maternity leave – which is not declared in self-assessment forms – needs to be addressed.

“The chancellor urgently needs to close the loophole in the Self-employment Income Support Scheme that discriminates against new mothers,” says Olga Fitzroy from the campaign group Pregnant Then Screwed.

Nearly 6,000 people have signed her online petition asking the chancellor to allow mothers to work out their average profits without having to include maternity leave in the calculation.

“Employees with children will get furloughed based on their salary, not their maternity pay – the same rules should apply to the self-employed. This is the wrong time to be penalizing families with young children,” Ms. Fitzroy says.

Pregnant Then Screwed estimates that around 80,000 self-employed women have taken maternity leave in the last three years.

When challenged on the issue by the Treasury Select Committee last week, the chancellor responded: “There is no way for HMRC to know the reasons why people’s profits may have dropped in earlier years from their income tax self-assessment returns.

“However, to help those with volatile income in 2018/19, you can determine your eligibility on either your profits in 2018/19 or on an average between 2016/17 to 2018/19.”

But Rebecca Coldicott, a freelance marketing consultant from Birmingham, says this is of little use to her after having two children in the last three years.

She adds that the government could find out who had been on maternity leave if it wanted to because it knows who has claimed Maternity Allowance – the money self-employed women get when they have to time off to have children.

“There have been huge fluctuations in my income in the last three years,” she says. “I know it could be difficult to work out, but it would be good if they could consider people’s circumstances rather than just use a computer to come up with a number.”

Credit: BBC News – Business

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