Reference card · working document
Lesson 6 is the money follow-up, and it needs two answers that aren't yours to give. Both are written out below ready to send. Nothing else is blocking.
Copy, fill in the two blanks, send. One reply settles the whole tax year.
Subject: Planning questions — baby due May 2027
Hi [name],
My partner and I are expecting our first child on 9 May 2027. She's on a fixed-term contract that ends 28 May 2027, so from June 2027 the household is on statutory maternity pay plus whatever TWP earns. I want to structure this year and next properly rather than find out afterwards. Five questions:
1. This tax year I've had roughly £10,000 of PAYE from my previous employer and have been taking dividends from TWP since. What's my remaining headroom to the £50,270 basic-rate limit, and how much should I hold back until after 6 April 2027?
2. Am I on course to cross £60,000 adjusted net income in either year? If so, what would an employer pension contribution from TWP cost against what it saves on the High Income Child Benefit Charge?
3. I believe the £10,000 secures my state pension qualifying year for 2026/27 — can you confirm? And what's the minimum salary TWP should run in 2027/28 to secure that year, given I can't claim the Employment Allowance as a sole director?
4. We are not married. In 2027/28 my partner will have unused personal allowance. Is there any safe way to use it — or does the settlements legislation rule out giving her shares, since the spouse exemption doesn't apply to us?
5. I'm building a cash buffer of roughly £18,000–26,000. Is it better held as retained profit inside TWP or drawn out and held personally, given corporation tax at 19% and the dividend position above?
Thanks,
Greg
Question 1 is the one with a deadline — the 2026/27 dividend decision has to be made before 5 April 2027, and it's the difference between 10.75% and 35.75%.
This is the single number that could move the £14,530 maternity shortfall, in either direction. It's in the contract, the staff handbook, or the HR intranet — and if it isn't findable, ask HR in writing and keep the reply.
| Find out | Why it matters |
|---|---|
| Is there enhanced (occupational) maternity pay above SMP? If so, exactly what — typically something like "X weeks at full pay, then SMP". | Directly reduces the £14,530 gap. Could be worth several thousand pounds. |
| Is there a repayment clause? Wording along the lines of "must return to work for N months or repay the enhancement". | The dangerous one. Her contract expires 28 May 2027, so she structurally cannot return — a badly worded clause could turn an enhancement into a debt. Read whether it's triggered by not returning generally, or only by resigning. Contract expiry is not a resignation, and that distinction is the whole argument. |
| Accrued but untaken annual leave — she keeps accruing holiday throughout maternity leave. | When the contract ends on 28 May 2027 she must be paid in lieu of it. Several weeks' pay, routinely forgotten, and it lands exactly when the money gets tight. |
| Pension during maternity leave — do employer contributions continue, and are they based on her normal salary or her reduced pay? | Employer contributions normally continue at the full notional salary during paid maternity leave. Worth confirming rather than assuming. |
| Any contractual notice or extension terms on the fixed-term end date. | Confirms 28 May 2027 is really the date everything is planned around. |
Her written notification of the pregnancy to Herman Miller is still the highest-value zero-cost thing available, and it's due by 30 January 2027. It starts the enhanced redundancy protection running to 18 months after the birth. Email, not a conversation, and keep the copy. Asking about the maternity scheme is a natural moment to do it — but the two are separate acts, and only the written one has legal effect.
Lesson 6 rebuilds the plan around them: the refined buffer target, the dividend split either side of 6 April 2027, and whether TWP runs a salary in 2027/28. Until then the rule from Lesson 5 stands unchanged — live on her salary, bank the dividends. Nothing either answer can say will make that wrong; they only change the target.
The booking appointment (27 Sep – 25 Oct) and the dating scan (11–25 Oct) both land while you're waiting on these replies. The combined screening decision wants making before you're in the room, and the scan has a hard cut-off at 14+1 weeks. Money has no deadline before April; that one does.