The maternity and mortgage struggle of being self-employed: ‘It was overwhelming at times’

Harriett Thompson started her maternity leave at the beginning of 2025, but at the start of this month she still had not received any of the statutory pay she was entitled to.

The freelance makeup artist described what she says is a familiar experience for a lot of self-employed mothers. “Luckily [my partner] Alex started a long contract when our daughter was born, which has enabled us to get by … That’s coming to an end now, with no future work in sight, so I’m getting anxious about receiving the money,” she told us.

Alex Tinney, the founder of Flex Pilates, says she faced similar delays. “I got my maternity pay literally the day I returned to work … I had to save up before going on maternity to cover my mortgage and bills and pay myself my maternity pay from my company despite the government not sending it to me for four months. Luckily, the company is in a position to do that, but that wouldn’t be the case for everyone.”

Thompson applied for 21 weeks of statutory maternity pay (SMP) at £187.18 a week (the maximum is now £194.32 a week). She says her leave was split across two tax years, so she should have received the initial payment in April last year. Instead, she had to wait almost a year longer than that, finally receiving a cheque in her hands on 8 April this year after numerous calls to HM Revenue and Customs (HMRC). The remainder should be paid this month. “The only reason I was given [for the delay] was that HMRC had a backlog and were behind,” she says.

“I have had numerous phone calls to HMRC, with a different story given each time, never mind the frustratingly long waits to get through and having to explain my situation over and over again.”

The cheque Thompson received this month is SMP for 2024-25, and HMRC told us it has now processed her claim for 2025-26. It has apologised to her.

Tinney, like Thompson, filled out the relevant paperwork to claim SMP as a self-employed worker with her own limited company. She says she had always intended to take relatively short maternity leave but returned to work after four months, having received nothing. Thompson, too, took on a part-time role after four months: “I felt I needed to contribute so I worked around naps. It was overwhelming at times.”

When Thompson mentioned the delay on a wider WhatsApp group for mums who work in TV and film, she says she was inundated with responses from women who had experienced similar issues. One reportedly waited three years, another two, and a third 18 months to receive their maternity pay. Some said they wrongly received threatening letters from HMRC. The common thread was that they were all freelancers registered as limited companies.

If you are self-employed as a sole trader, you usually apply for maternity allowance instead of SMP. However, if you are self-employed and have your own limited company, your company can pay your SMP like any other employee, and you can usually claim part or all of it back from HMRC.

Richard Douglas, a director at the advice firm Oakworth Financial Planning, says that in this area, HMRC’s systems work “for the traditional employer-employee relationship – statutory maternity pay is claimed through payroll and is therefore an automatic reimbursement”.

He adds: “The issue for these women is that they are the owner and staff. They apply for funding before they go on maternity leave to pay back their company rather than it just feeding through payroll, at which point it becomes manual rather than automatic. HMRC systems work well when you operate within the automatic processes. Once it becomes manual, timescales are almost impossible to predict due to a lack of processing staff and extra verification checks.”

Selina Flavius, the founder of the financial coaching and training company Black Girl Finance, says HMRC’s systems are “clunky”, adding: “Many business owners end up getting letters saying they owe money even when they don’t – it’s a known administrative mess that accountants deal with regularly.”

She says: “The statutory maternity pay money is there, and claiming in advance or month to month is legitimate, but it was designed with traditional employers and employees in mind. For director-owners, the process is awkward, slow and prone to HMRC’s systems getting confused.”

‘I’m still not earning what I was’

Even when the system works, the self-employed can end up with less than employees. “Maternity allowance has the same rate as statutory maternity pay, but it doesn’t have the six-week average earnings uplift [where you get] 90% of your average wage, which can mean losing out on hundreds or thousands of pounds,” says Catherine Goldfinger, the founder of Milk & Money, which provides resources to simplify parenthood finances. As well as this, she says: “If your business will wither without you, you’ll also quickly use up your 10 ‘keeping in touch’ days.”

The acupuncturist Saskia Hawkins relied on personal savings and cut short her maternity leave as maternity allowance did not cover her costs. “When I returned to work, I effectively had to rebuild my business from scratch, and, more than a year after having my child, I’m still not earning what I was,” she says.

On the day we are in touch, her baby has a fever, so she has had to cancel all her clients for the day. “Of course, this is exactly where I want to be, but it means I earn nothing,” she says.

Katie Guild, a co-founder of Nugget Savings, which provides financial resources for new parents, was running a nightwear brand when she had her first baby. “I worked in some shape or form throughout the first year of my son’s life – even while he was in a neonatal intensive care unit,” she says. “Sadly, I don’t think my story is uncommon.”

After Katie’s second child was born, she took three months off. “Most female founders I talk to take three months off – at a push, six. There is a fear that if you take more, there won’t be a business to come back to.”

‘Getting a mortgage was an absolute nightmare’

Obtaining a mortgage when you are self-employed and on maternity leave can definitely throw up challenges. It is likely to be simpler if you can show you have employees to take care of the business while you are away, the mortgage broker Habito says. However, it adds: “If you’re a sole trader or the business can’t carry on without you, that will have a big impact on your income. So lenders might be less willing to grant you a mortgage.”

For Rachael Twumasi-Corson, a self-employed consultant and mum of four, periods of maternity leave meant it took three years to get a mortgage.

“In early 2019, we couldn’t get a mortgage because I had to supply three years of tax calculations and company accounts, and my income was up and down as I’d had babies in 2016 and 2018,” she says. “When we eventually did buy, in late 2021, we had to put down a larger deposit of 15% and use a specialist broker.”

Tinney describes getting her mortgage as “an absolute nightmare”. Despite earning more than her partner, it took six months, and she had to jump through endless hoops, providing “bank accounts for my sole trader and my limited company, a reference from my accountant, overview and projections, car information, documents from our childcare provider, my daughter’s birth certificate, and expenses of anything leased within my limited company”. She says her partner, who is an employee, just had to provide three months’ statements and payslips.

Brad Clarke, a mortgage broker at Atkins Financial Solutions, says the system works against self-employed mothers. “Lenders mostly average the last two years of accounts, unless earnings in the latest year have reduced,” he says. “Even if that reduction in income is due to maternity leave, they’ll take the lowest figure, which can have a large impact on borrowing.”

You might think you can provide tax returns going further back to prove a steady income prior to maternity leave, but that isn’t the case. “The position of lenders is black and white: if your income has dropped, regardless of whether it’s due to maternity leave, your affordability drops”, Clarke says.

He gives the example of a freelancer who has seen her tax calculations go from £60,000 one year to £30,000 in the one when they are taking maternity leave. “That could impact affordability by about £150,000,” he says.

‘It isn’t enough to live on’

Elinor Birkenhead-Jones, a freelance set decorator in the TV industry, is in the process of moving house. Despite taking only six weeks’ leave after giving birth by C-section, her drop in income means the bank has offered to lend her and her partner considerably less – so they have had to dip into their savings.

In the two months leading up to the birth, she could only take projects that lasted two or three days as she was unable to commit to months-long jobs while heavily pregnant. She also decided not to claim maternity allowance; the couple instead opted for her partner, a civil servant, to take a full year of paternity leave: full pay for six months, then statutory paternity pay for three, and nothing for the final three months, aside from the 10 paid keeping in touch days.

“I’m not turning my nose up at maternity allowance, but it isn’t enough to live on, so I would have had to go into my savings to pay our mortgage and bills, and I didn’t want to reduce that safety net to nothing,” she says. It wasn’t an easy choice. “I was ‘pumping and dumping’ three times a day to keep my milk supply up and doing the night feeds. I can’t imagine how I was getting by on so little sleep and then going into work, but I felt like I didn’t have a choice.”

As Tinney discovered, the difference between what is expected of employed versus self-employed people is striking.

Clarke says: “For employed clients, most [mortgage] lenders simply ask if they’ll go back to work on the same terms, and all I have to do is say yes. No evidence is required. A new mum might actually go back to pro rata on three days a week, but they’ll take the whole income into consideration.”

If you are remortgaging rather than buying a home, the rules can “make you a mortgage prisoner, in the sense that you can’t remortgage to another lender”, Clarke says.

HMRC: ‘We’re allocating more staff to help reduce wait times’

We asked HMRC about Harriett Thompson’s case and the wider issues raised by our report.

A spokesperson said: “We apologise to Ms Thompson and have sent her a refund.

“We receive millions of tax refund claims every year, with the vast majority paid promptly, but we’re allocating more staff to help reduce wait times.”

They said the government had identified improving customer service performance as a big priority for HMRC, as well as reforming and modernising its services.

HMRC said it received Thompson’s SMP application for 2024-25 in April 2025. It said it received a phone call in December 2025 requesting SMP for 2025-26, adding: “We advised at the time to apply for advance funding as we would be unable to process a request until the end of the 2025-26 tax year, as outlined in the online guidance.” However, according to Thompson, April 2025 was not when her accountant applied for her SMP, it was when they chased the application, and she said the December 2025 phone call was chasing up payment.

HMRC said it issued a cheque on 12 March this year, which included an amount of SMP for 2024-25. Thompson said she did not receive the cheque until 8 April.

HMRC said it had “since processed the claim for 2025-26”, which included an amount of SMP. When we spoke to her earlier this week, Thompson said she had not received this yet.

‘UK offers self-employed fathers nothing at all’

Families where both parents are self-employed face an extra struggle in the UK.

According to Alex Lloyd Hunter, a co-founder of The Dad Shift, which campaigns for fair paternity leave: “The UK is a real outlier in offering self-employed fathers nothing. Self-employed couples are the most disadvantaged of all parents, with mums getting maternity allowance but new dads getting nothing at all.”

He adds: “On average around Europe, dads get eight weeks’ paternity pay, and that pay is often linked to salary.

“In Spain, for example, dads get 16 weeks on full pay, while in Sweden they get 34 weeks on up to 80% of their salary. Over two-thirds of countries in the EU offer self-employed people paternity leave, and often this is the same entitlement as employed people.”

Those countries’ fairer maternity and paternity pay policies will have a knock-on positive impact on mortgages in those countries, too, as earnings won’t drop as harshly as in the UK.