If you are business owner with a partner expecting a baby, then did you know you could be saving on tax by taking paternity leave and paying yourself for it? If not read on to find out what you are entitled to and how and when to claim.
It’s common knowledge that maternity pay is claimed automatically by mothers having a baby or adopting one but less is known about who is entitled to paternity pay. One thing to point out is that both males and females are entitled to paternity pay when the latter is in a same sex relationship.
The other thing you need to know as a business owner of a limited company is that if you pay yourself a wage out of the business you can take 2 weeks off for paternity without losing money. This is because you can claim that the money back from the government when you submit your tax return. So while in the short term you may of course be losing money, you will get it back later.
It is important to note that you can only claim your entitlement to paternity pay if you own a limited company or employee. Self employed sole traders will not get to benefit and will need to plan ahead to allow sufficient funds to cover for having two weeks off work.