UK Tax Tools

Having a baby — UK tax & benefits guide

Six stops every new UK parent should know about — from the 15-weeks-before-due-date employer notice through to the HICBC self-assessment the year after. Each links to the calculator that does the maths.

The six stops

Statutory Maternity Pay → Statutory Paternity Pay → Child Benefit + HICBC → Free hours + Tax-Free Childcare → Universal Credit child + childcare elements → Pension + Personal Allowance planning →

Statutory Maternity Pay

39 weeks paid: 6 wks @ 90% AWE, then 33 wks @ £194.32/wk (2026-27). Employer pays via PAYE with 92% (109% Small Employers' Relief) reclaimable from HMRC.

Paid weeks
39 of 52
First 6 weeks
90% AWE
Weeks 7-39 (2026-27)
£194.32/wk
Service test
26 wks by 15th wk before due date
Earnings test (LEL)
≥ £129/wk (2026-27)
Tax note: SMP is taxable income with PAYE + Class 1 NIC deducted. Often dips into 0% PA band for part-year leave — consider moving pension contributions from gross-salary to relief-at-source to avoid wasted 40%+ relief.
Maternity pay calculator →

Statutory Paternity Pay

2 weeks @ £194.32/wk or 90% AWE (2026-27). From 6 Apr 2026 under ERA 2025, paternity LEAVE is a day-one right; SPP still requires 26 weeks service.

Paid weeks
2
Rate (2026-27)
£194.32/wk or 90% AWE
LEAVE service test (Apr 2026+)
Day-one right
PAY service test
26 weeks
Tax note: SPP is taxable + NIC-able through PAYE. Eligible parents can also tap into Shared Parental Pay (ShPP) from the mother's unused 37-week SMP pool for greater flexibility.
Paternity pay calculator →

Child Benefit + HICBC

£27.05/wk first child, £17.90/wk each additional (2026-27). High-earner clawback (HICBC) phases in from £60,000 to £80,000 adjusted net income.

First child (2026-27)
£27.05/wk
Additional child
£17.90/wk
HICBC threshold
£60,000 ANI
HICBC full clawback
£80,000 ANI
HICBC rate
1% per £200 over £60k
Tax note: Always register — even if you opt out of payment. The NI credit attached protects State Pension for the non-working parent. Earners between £60-80k: consider pension top-up to pull ANI back under £60k and keep full CB (60%+ effective relief in this band).
Child Benefit + HICBC calculator →

Free hours + Tax-Free Childcare

Working parents of under-5s: 15 hrs/wk from 9 months (Sep 2024), 30 hrs/wk from 9 months (Sep 2025). TFC: 20% govt top-up to £2,000/yr/child, up to age 11.

Free hours (from 9mo, term-time)
30/wk (2025+)
TFC annual cap per child
£2,000
TFC cap disabled child
£4,000
Parent earnings floor
£203.36/wk
Income ceiling (each parent)
£100,000 ANI
Tax note: TFC cannot combine with Universal Credit childcare or employer vouchers. It CAN stack with 15/30 free hours for additional hours beyond the entitlement. ANI >£100k on either parent disqualifies BOTH schemes — another argument for pension contributions to stay under £100k.
Tax-Free Childcare calculator →

Universal Credit child + childcare elements

Child element £303.94/mo first + £303.94/mo subsequent (two-child limit abolished 6 Apr 2026). Childcare element reimburses 85% up to £1,071.09/mo (1 child) / £1,836.16/mo (2+).

Child element (2026-27)
£303.94/mo
LCWRA (new, post-2025)
£217.26/mo
Childcare cap (1 child)
£1,071.09/mo
Work allowance (housing)
£427/mo
Taper
55p per £1
Tax note: From 6 April 2026 the two-child limit is abolished — a significant expansion for families with 3+ children. Benefit cap frozen at 2025-26 levels. Claim early; each full calendar assessment period missed is permanently lost.
Universal Credit calculator →

Pension + Personal Allowance planning

A year on SMP often drops household income into lower bands. Strategically, this is when pension contributions at basic rate are LEAST efficient — but it's also when income-based child benefit/childcare rules matter most.

Personal Allowance
£12,570
PA taper (frozen to 2031)
£100k-£125,140
60% trap zone
£100k-£125,140
HICBC window
£60k-£80k
Tax note: If the higher earner is near £60k, £80k, or £100k thresholds: pension contributions can pull ANI back under the critical line. The effective tax saving can be 60%+ once you factor in restored PA, restored CB, and restored TFC eligibility — the most powerful tax planning window in the UK system.
Pension sacrifice calculator →

Claims & milestones timeline

  1. As soon as you're pregnant
    Tell your employer before 15th week before due date
    Legal deadline for SMP + paid time off for antenatal appointments. Employer needs MATB1 form from your midwife.
  2. From 25 weeks pregnant
    Apply for Maternity Allowance if self-employed / ineligible for SMP
    Maternity Allowance is £194.32/wk for 39 weeks. Claim via MA1 form — backdated up to 3 months.
  3. By 15 weeks before due date
    Confirm leave start date + SMP amount with employer
    Form SMP1 if declining SMP (e.g. Maternity Allowance is higher for some self-employed). Form MATB1 required.
  4. Before birth
    Review Personal Allowance impact
    SMP for 39 weeks at full rate = £7,578 — well below the £12,570 Personal Allowance if taken across a full tax year with no other income.
    Income tax calculator →
  5. 28 days before leave
    Partner: submit SC3 paternity notice
    Statutory 28-day notice before intended leave. Day-one right to paternity LEAVE from 6 Apr 2026; pay still requires 26 weeks service.
    Paternity pay calculator →
  6. Birth
    Register birth + get NHS number
    Required for Child Benefit claim, free childcare applications, and adding child to health records.
  7. If neonatal care is needed
    Tell your employer and record the care dates
    For babies born from 6 Apr 2025, each 7 consecutive full days in neonatal care can create 1 week of day-one leave, up to 12 weeks. Statutory pay has separate service and earnings tests.
    Neonatal care pay calculator →
  8. Within 3 months
    Claim Child Benefit (form CH2)
    Can backdate 3 months only. Even if you expect full HICBC clawback, tick 'no payment' to still get the NI credit toward State Pension. Especially important for a non-working parent.
    Child Benefit calculator →
  9. Returning to work — 31+ weeks in
    Consider Shared Parental Leave (SPL) + ShPP
    Up to 50 weeks of SPL shared between parents + up to 37 weeks ShPP from mother's unused SMP pool.
    Maternity + ShPP calculator →
  10. From 9 months
    Apply for 15 hours free childcare
    Apply via gov.uk/get-childcare-funding — eligibility code needed for provider. Income test £203.36/wk per parent, £100k ceiling.
  11. Anytime
    Open Tax-Free Childcare account
    £2 top-up per £8, up to £2,000/yr/child. Useful for holiday clubs, extra hours, or private nurseries.
    Tax-Free Childcare calculator →
  12. Earning over £60,000
    File Self Assessment for HICBC
    If either partner's adjusted net income exceeds £60k, the higher earner must register for SA and pay back Child Benefit. From April 2026, HMRC will offer HICBC-via-PAYE as an alternative.
    HICBC calculator →
  13. Low household income
    Check Universal Credit child element
    £303.94/month per child (2026-27) + childcare element 85% to £1,071.09/month. Two-child limit abolished from 6 April 2026.
    Universal Credit calculator →

Commonly missed opportunities

  • NI credits from Child Benefit — Even if HICBC claws back 100%, the non-working parent gets a State Pension NI credit worth hundreds per year in retirement. Always register, even if you tick the "no payment" box.
  • Pension contributions to restore HICBC / PA / TFC — A single pension contribution can pull ANI under £60k, £80k or £100k, restoring Child Benefit, Personal Allowance, and Tax-Free Childcare simultaneously. Effective tax saving routinely exceeds 60%.
  • Marriage Allowance — If the lower-earning parent uses less than the full £12,570 PA during maternity, they can transfer £1,260 of it to a basic-rate partner, saving £252/yr. Available if neither partner is a higher-rate taxpayer.
  • Backdated CB limited to 3 months — Unlike many HMRC claims, Child Benefit only backdates 3 months. Register early.
  • Shared Parental Leave — SPL is still under-used: only ~2% of eligible fathers take it. It allows the mother to return to work while the father takes up to 37 weeks of paid leave from the remaining SMP pool.
  • Additional pension contribution during low-income year — SMP year income often dips below the Personal Allowance. That is exactly when a relief-at-source personal pension or SIPP is worth most: the provider reclaims 20% from HMRC even though you paid no Income Tax, on up to 80% of your earnings — or £2,880 net (£3,600 gross) if you have no earnings at all. A net-pay arrangement gives a non-taxpayer nothing, because there is no tax to relieve; salary sacrifice also does nothing once pay is below the Personal Allowance.
  • If parents separate — Child maintenance obligations under the Child Maintenance Service (CMS) 2012 scheme kick in once parents stop living together. Use our Child Maintenance Calculator to estimate weekly payments.

Frequently asked questions

Is Statutory Maternity Pay taxed?

Yes. SMP is taxable earnings and has Income Tax + Class 1 NIC deducted through PAYE. It counts toward your Personal Allowance for the year. The employer reclaims 92% of SMP from HMRC (109% for small employers qualifying for Small Employers' Relief, i.e. total Class 1 NIC liability of £45,000 or less in the preceding tax year).

How long is UK statutory maternity leave and pay?

52 weeks of maternity leave (26 weeks Ordinary + 26 weeks Additional). Of that, up to 39 weeks of SMP: first 6 weeks at 90% of AWE, then 33 weeks at £194.32/week (2026-27) or 90% of AWE if lower. The final 13 weeks of leave are unpaid statutorily.

Who pays Statutory Paternity Pay and for how long?

Employers pay SPP for 2 weeks at £194.32/week (2026-27) or 90% of AWE if lower. From 6 April 2026, under the Employment Rights Act 2025, the right to paternity leave is a day-one employment right; the 26-week continuous service test now applies only to the pay, not the leave. Shared Parental Leave + ShPP can extend this from the mother's unused 37-week entitlement.

What is HICBC and will it affect me?

The High Income Child Benefit Charge claws back Child Benefit if either partner has adjusted net income over £60,000 (2024-25+ reformed thresholds). 1% is reclaimed for every £200 over £60k; fully reclaimed at £80k. You still get the NI credits that come with Child Benefit — don't opt out, instead tick the 'no payment' box if fully within the clawback range.

How do I get free childcare hours?

All working parents of children under 5 are entitled to government-funded hours: 15 hours/week from 9 months (expanded September 2024), rising to 30 hours/week from 9 months from September 2025 in eligible settings. Each parent must earn at least £203.36/week but less than £100,000 adjusted net income to qualify.

What is Tax-Free Childcare and can I stack it?

A government top-up of £2 for every £8 you pay into a childcare account, capped at £2,000/year per child (£4,000 for disabled children). You cannot combine it with Universal Credit childcare, employer childcare vouchers (legacy), or 15/30 free hours scheme — but you can use the free hours AND TFC for additional hours beyond the free entitlement.

Sources

Last updated April 2026. Reflects 2026-27 Child Benefit rates and 2026-27 statutory pay rates (£194.32/wk from 6 Apr 2026). Employment Rights Act 2025 day-one paternity leave applies from 6 April 2026. HICBC figures reflect post-2024-25 reform (£60k-£80k taper). Two-child limit abolished from 6 April 2026. This is general information — consult HMRC or a qualified adviser for personal circumstances.