Can someone settle this Child maintenance debate?

[SpongebobNoPants]

Ex and I have a private agreement for CM, not through the CMS.
He is a contractor working in the IT sector getting paid £33k annually.
He is arguing that CM is based off his net income of £25k but I’m 99% sure it goes off gross income regardless of whether you’re on a fixed term contract or full time employee.

I’ve googled it but I’m not getting a clear answer. Can someone with more knowledge clarify?
I thought bonuses / over time / shift allowance was included in the gross amount also

We were never married and no private school fees or anything like that.
He pays £250pcm and never a single penny more. Nothing towards childcare, even if I have to pay extra to cover days he is supposed to cover, never a single penny towards any clothing or uniforms, never even a £1 for comic relief for school etc.
He would never wash our son’s clothes even before sending them back. If our son is poorly I have to send calpol, sudacrem, Vicks or whatever it is that he needs.
I can’t force him to help out more and just end up paying for absolutely everything myself.

If he only works for one client, under IR35, he isn't self employed. He will have to pay tax through PAYE. Is that what he means?

I think (off the top of my head) there is a flat 5% rate for expenses under IR35 when they calculate his "deemed" salary for PAYE/tax purposes. So (if I am correct) it seems like he is telling porkies if he is claiming his deemed gross salary is £25k after 5% expenses have been deducted from the £33k. Unless he is paying a lot into a pension? Pension contributions are deducted from gross income when calculating CMS.

If he is actually self employed, working for multiple clients, it is different. It would be based on his gross taxable income but that isn't his turnover (the money paid by the clients), that is his profit after business expenses have been deducted. It's different again if he has a limited company, then it would be based on how much the company pays him/he takes out of the company, not the company's turnover/profits.

Just on the profit vrs turn over thing. I have no dealings with CM at all and I'm in ROI. But I would imagine it is profit. I'm an accountant, now it does depend on what you do and I can't imagine in something like IT input costs would be huge. But it would be very unfair to assess someone on their turn over, e.g. a plumber who supplies labour and parts may have 60k in sales but once you deduct parts/ possibly paying someone else to help/ other costs profit may only be 20k in profit.

But I really do not get men begrudging their kids stuff! I've had friends in shitty situations that would make you think WTF!! Does you ex have a good idea of what child care etc costs or thinks he is just paying for you to 'live it up'

BTW your DS should get a unicorn 😂

It’s pre-tax post pension income. Go through CMS so he can’t argue.

^He’s said “Under IR35 you have employee costs which means you earn less than before tax and NI. Therefore I am overpaying you.

He sounds like someone who got a shock when hr started getting treated like an employee rather than enjoying the perks of contracting as a limited company?

Yes, we all take home less after tax and NI. That's how it works. Has he only just figured this out?

It sounds as if he's being treated as a deemed employee so the gross (post-pension) salary would apply.

Its tricky because when I was a self employed cleaner I was paid by my clients. That was my "turnover" but technically from your perspective my gross income. But I had to pay for cleaning products, advertising, insurance etc so those were expenses, went on my tax return and I wasn't taxed for that. My profit after deductions was taxed and would actually be classed as my "gross" income even though the money going into my account was more iyswim?

I don't like his threatening tone though, as if you should be grateful for the crumbs he gives you. You mentioned what the cms calculator tells you, is it more, less or the same as what he gives you now?

As soon as you go through the CMS, be prepared to ask them to carry out a variation on his income.
M my ex was self employed and as soon as the CMS claim went through he started to hide money but withdraw dividends which they won't look at until you ask for a variation.

Self employed and CMS is crap. We have £11k debt on ours as my ex h is self employed and they never do anything about it despite me going to court and getting ruled in my favour. It's a joke.

He is an IT Contractor earning just 33k p.a. ???

What else does he do with his time, since he is clearly only working part-time in the IT job?

My ex is an it contractor also. He cleared £100k most years. We get £56 a month as he's self employed

He’s talking shit. If he’s captured by IR35 then he’s deemed as an employee and therefore CMS will be due on the 33k (less 5% for expenses).

CSA used to be based on your net income. When it changed to CMS they changed the calculation to gross of tax and NI but after pension contribution. So gross taxable income as on your P60.

He is a contractor working in the IT sector getting paid £33k annually

What's he doing with the rest? £33k as a contractor in IT hahaha. If he within scope of IR35 it will be on his gross income.

The 5% expenses allowance on £33k is £1.65k, making his gross income £31.35k, which is £25k net after income tax and NI...

Sounds like he is pulling a fast one and claiming that his tax and NI are "business expenses".

Unless he is deducting pension contributions (correctly). But based on the fact that he didn't say that and is claiming CM is based on net income, I suspect I am right that he is pulling the wool over your eyes.

I wouldn't trust him that he is only earning £33k as an IT contractor either, unless he is only at entry level.

I don’t care if this is outing… this is what he sent me

I was just going to say the same. 33k seems really unlikely.

He works full time but he isn’t the brightest spark and he’s never earned more than £35k. He isn’t a high flyer, he has a basic level job where he provides security keys for access to certain websites, I believe one used to be Royal Mail. He’s basically a cyber security gatekeeper but not working in actual cyber security. I believe the income he’s quoting is likely correct.

Have you looked at help with child care costs through UC ? The maintenance doesn’t count as income.

I earn £35k and I’m married so I’m not eligible for UC. I’m not hard up by any means, I just don’t think it’s fair that I’m expected to cover 90% of all costs for our son and he argued over a £10 haircut!

Absolutely zero point in being a contractor at that level of pay.

If he's inside ir35 he has to pay employers and employees tax and NI. Which does distort his annual rate of pay compared to a regular salary, especially without paid leave.

Ah he’s fudging isn’t he? What are his £1670 expenses? He is taking them off first as a gross wage of £33k would bring in more than £1700 a month.

Like I said, he’s not the brightest spark.

I just hope he doesn’t reduce CM further because every penny helps when you’re covering all expenses

The only expenses he has is a bit of petrol and maybe he’s claiming for his electricity working from home? He’s predominantly home based so he has minimal commuting costs and all equipment (lap top, phone etc) are provided by his employer.

@SpongebobNoPants tax free childcare will save you 20% of your childcare?

@SpongebobNoPants It's gross salary after pension contributions. So if his gross salary is £33K assuming 5% pension contributions that annual amount on which CMS would be calculated would be: £31350.

Also IR35 is tax legislation aimed at combating tax avoidance of independent contractors (& the firms who hire them) and to distinguish between workers who are bona fide independent contractors and those who are to all intents employees. In other words not really relevant to CMS. The objective is to avoid contractors paying less tax than employees - i.e. level the playing field and to stop firms avoiding paying employees workplace place benefits - all of which renders his argument around IR35 moot.

Tax free expenses (if he means related to his employment) are entirely separate. For example, when I travel at the behest of my employer I can claim mileage reimbursement tax free. I can also claim certain office equipment and other deductible expenses. Since expenses aren't part of his earnings, again moot.

I believe he can ask for certain deductions to the CMS paid based on expenses he incurs like the cost of fuel to travel between homes.

I don’t think I can claim as it’s school wraparound care so when you average it out over the year it works out too little to claim. And they have to be in consistent childcare for 6 weeks or more so it doesn’t cover school holiday clubs etc