Calculating maintenance when exH is self employed- help please!(8 Posts)
I have a little dream place in my head I disappear to when things get tough between me and my husband. Its where dc and I live in another happier house without him, and planning on how we might get there is my little bit of escapism that gets me through the week. Nothing sinister about the situation apart from the fact that I am terribly unhappy and my teeny dreams make things much more bearable.
Now, this sounds so calculated and cold but as part of my planning I need to get my finances in order and I am trying to work out how much maintenance he might have to pay. I have used the CSA calculator but the issue I have is that he is self employed and whilst his turnover doesnt fluctuate too wildly from one annual total to the next he pays himself a small amount of wages and takes the rest as a dividend at the end of the year. So basically a small salary with a massive (in comparison) bonus.
Has anyone else had a smiliar situation and if so how does CSA work around this? I know that I will have to go to them to sort this out as one of the reasons I am even considering this is because he is very controlling where money is concerned. So a family arrangement would be out of the question.
Any advice very gratefully received.
Doesn't sound calculating at all, sensible is the word you are after.
My ex is also self employed, but we came to a mutual arrangement (which is way less than he should pay) because I figured something is better than nothing. I would contact the CSA, and ask how they would work it. No harm in asking.
Keep planning, look at what benefits you may be entitled to, if other things are likely to change (I am assuming you intend to leave rather then ask him to go), then look at work/childcare options, transport links, what you are going to do about joint bank acounts, insurance policies, loans; what you propose for contact time with him and DC etc etc etc. have a lsit of all of the things you need to do as soon as you leave, with contact numbers etc. even if you don't intend to use one, find a suitable soliciter that you can use if need be. then when you are ready, you won't be stressing about the practical stuff, which will give you more strength to deal with the emotional side.
Good luck x
If he draws a small wage it will be the proportion of that, self employed people do get away with paying less due to this,
If he is self emplyed he will complete a Tax Return. You can advise the CSA that they need to see his Tax Return as most of his income is via dividends and his payslips will give a false indication of his income.
The CSA will calculate on his total income from his Tax Return.
I have several clients who provide their tax returns to their ex/CSA to show their actual income. Some have dividends or significant rental income and the like. If he doesn't want you seeing the actual figures to know where all his money comes from he can simply provide it to the CSA and they will work it out for you/him.
I would speak to him first, if you can, and ask him what figure he had in mind bearing in mind the CSA calculation and point him at their calculator. If his offer is way off what you think then by all means ask the CSA to get involved. If he offers a reasonable amount and you're happy with it then it may be better all around to agree things between you instead.
If he takes dividends from the company then the CSA will count this as income too.
As gilly says, they'll use the figures on his latest tax return. This will include the bonus as well as the wages. Trouble is, a lot of self-employed peolple are rather good at managing to offset a lot of everyday expenditure as expenses, so their taxible income can look quite low.
Absolutely as other say - the tax return is the document that will be used to assess his income. I just don't buy the myth that self employed can 'fiddle' the figures..Being self employed does have tax advantages over PAYE but this is entirely legal. You can only claim for legitimate and allowable expenses and no reputable accountant (their profession is registered) would do anything illegal to save a client a few hundred pounds of tax, in an attempt to reduce CSA payments. There are also benefits to PAYE (& I have given up self employment to pursue PAYE) so understand both sides of the coin.
Dividends payments are at a lower rate of tax which means net income is higher (so us the tax payer loses out) however as CSA is assessed on Net income the CSA figure would be higher and the Parent with care (usually mum) will receive a higher assessment.
Thanks everyone. Reassuring advice.
Lots to think about, as I am in name the Company Secretary of his Limited company perhaps I should be more aware of what his accounts look like. He's away until Friday night so maybe I can poke my nose in his records (he's meticulous and keeps everything neatly filed!)
When I hear that perhaps all his dividends aren't taxed at the 40% he says...
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