Advice for anyone claiming CM with self employed ex

[Raindropsonrose]

Posting on AIBU for traffic.

The CMS only factor in PAYE which is usually the £12K tax free allowance. This is what CM is based on. However if your ex is self employed, dividends are classed as unearned income until you contact the CMS and apply for an ‘income variation’. Only then will they include dividends in the monthly calculations.

Thought this would be useful for anyone who feels their ex is fiddling the books and you are receiving a low CM amount.

Raindrop and then be prepared for CMS to still truly screw your children over, even when the dividends are discovered. It’s a long, horrendous battle. It sounds to me like you think you have ‘won’ the variation stage? Has this actually been applied to payments? From the ‘effective date’? If not, you need to move quickly and fill out an SSC2 form and take it to tribunal where the corporate veil will be fully lifted and your children finally get two parents financially supporting them. It shouldn’t be this hard!! Good luck. I really hope you don’t have the fight I’m detailing above… but I strongly suspect you will.

No not at all. My post is there for advice to others. I don’t have any problems receiving CM which is an agreement I have in place. However a friend goes through the CMS and is self employed. He doesn’t hide anything etc, everything is on full view, but as he is self employed he discovered they automatically fixed the CM without referring to his dividends (which he had expected them to do). His ex then made the application, it was relatively simple and straightforward and his payments shot up as soon as his dividends were taken into account. This post was designed to help others as it was a simple process for his ex.

@Raindropsonrose apologies, I thought you were going through the process yourself and were at the early stages. I just wanted to give you the heads up that usually it’s a long and drawn out process eventually resulting in a tribunal. That’s fantastic that the ex was so accommodating with providing the information. I have never came across that approach before from many many dealings with this exact situation- Self employee/Ltd Company Directors avoiding paying fair CMS. Can I just ask (and obviously feel free not to answer) why are they using CMS and not a family based arrangement if the ex is so accommodating with paying CMS?

There’s plenty of other ways SE people can hide their money, all happily assisted by regular accountants; I wouldn’t be celebrating yet if I were your friend.

Exactly this… my suspicion is that he is seriously under declaring and that’s why he’s jumped to an agreement. Call me cynical… because I am, but I strongly suspect there is a lot more to this story.

@MississippiAF that's what I think my ex may be doing. His earnings have been all over the place these last 2 years. Now his earnings are £0 currently. Court tribunal has been pending 14 months the wait is horrendous.

@Sweetheart7 take him to tribunal. Variation request- will fail, within 30 days make a mandatory reconsideration, which will fail, within 30 days fill out the SSC2 form (google it) and take him to tribunal. It’s the only way. Best of luck.

Apologies @Sweetheart7 you said, tribunal is pending. I was skim reading. Why 14 months? Are CMS not adhering to LEGAL timeframes (most probably) You need to contact your MP.

The thing is, if you have a limited company, this is exactly how your accountant will tell you to pay yourself; different amounts each week/month, minimum salary, varying dividends each week/month, and full use of expenses.

And that’s without any real ‘creative’ accounting; that can happen on top.

CMS don’t have the ability or wherewithal to account for this.

Interesting. I get nothing at all because my ex is on some start up scheme through universal credit, where he doesn't have to earn a minimum amount for a year. I've applied for a variation and they still say he doesn't have to pay because of the benefits he's on, even though I know he's working

@MississippiAF but CMS should have the ability to account for this. We are talking about much needed income to lift many children in the UK out of poverty. It’s just not a good enough argument anymore, to say, oh we can’t. There is the FIU, what do they actually do? There are now better links with HMRC (only useful if they actually declare their true income). With SME’s making up a sizeable amount of the economy and growing year on year. Closing this ‘loophole’ should be a government priority. I wonder why it isn’t?

@MississippiAF so my ex studied accountancy at uni himself! He has various accounts on company house as a director. CMS are useless indeed I am awaiting a court hearing.

@cadburyegg you need to ask them to look at additional income. Being on benefits is not a get out of paying CMS… as they would like you to believe.

@Theemeperorsnewclothes its nothing to do with CMS once you escaulate it to the courts. The tribunal just say CMS is one of the longest and complicated cases. I have my case ready to list I'm just waiting on a date. There's no time frame at all and they aren't allowed to state one apparently.

@Sweetheart7 I suppose it depends on your locality and the tribunal list they have to get through. You say, you have “I have my case ready to list” what do you mean by this? You are just waiting on a tribunal date? I have successfully been through the tribunal process and won, so I do know how the whole process works. I would strongly advise you to get your MP involved given the timeframes.

@Theemeperorsnewclothes thanks I will look into my MP tomorrow. My case has been listed, it will be a face to face hearing I'm just awaiting a date. How long did you wait?. Covid likely has slowed everything down too.

Unfortunately as many have said above, it's not that simple. My ex is self-employed and puts everything through his business so can pay himself very little. At one point, even his rent was going through there FFS! Even more of a kick in the teeth is that I know his pay as he's in the same contractor role as when we split and then he was earning £145k a year, probably more now. On our divorce papers (just going through now) he's down as earning £30k. It's disgusting

Technicality but having a limited company is not “self employed”.

he is employed by the limited company, so from a CMS point of view no different to any other PAYE worker.

a director paying themselves PAYE and dividends is not “fiddling the books”, and as you point out dividends are declarable to HMRC so if you apply for a variation it is all there.

actual self employed persons can hide income. Cash in hand etc. Self employed is a totally different beast to a limited company, accounting is different, and you’ll have a much tougher job getting a variation on someone who doesn’t declare income to HMRC.

@Sweetheart7 it was about 8 months but would have been sooner if there had not been a delay over the Judges directions (from the other side of course) Your wait is not acceptable. My MP pushed a few things forward for me. It’s worth getting them involved.

@Stressymadre It really isn’t simple, and it’s hugely stressful and it’s designed to make you give up. Don’t give up. Look at my posts above. You NEED to follow the process and get to tribunal. Being stuck within the CMS system is like repeatedly slamming your head into a brick wall. You need to get out of it. You need to know the steps to get there. That is the only way. Take it from someone who probably has seriously reduced life expectancy from the stress of years of being stuck within this hell. Don’t be that person.

You will also have an extremely tough time getting CMS to properly investigate a Ltd Company Director. They will allow them to declare any made up figure they choose (often in the £9000 to £12000 bracket) and they take no responsibility for questioning that. Despite the glaring hypocrisy of an organisation that’s paid for by Taxpayers… and no matter what the media like to report. Most single mothers are in employment… and paying their taxes. While these self employed/Ltd Company Directors are on the edge of what is legal and not in paying NI and Tax. What an utter disgrace of a system, and a disgrace of lack of political will to change the ‘system’ and an absolute travesty for the children living in poverty.

@Theemeperorsnewclothes thank you I thought the same 15 months without a date by now is taking the mick!. I have contacted my local MP and they have contacted DWP... they said the court side are independent but hopefully can push the CMS. I can't believe we are in 2024 and these men are allowed to just get away penny nothing at all.

This post was designed to help others in case they were not aware of requesting variations.

Nice men can end up with toxic ex wives and nice women can end up with toxic men. My friend is decent, I’m not here to argue his position. Self employed can be cash in hand as well as working via a limited company. If my friend doesn’t work then the company can’t pay him since it’s his own company. Many people are in this working position and as such I wanted to raise a little awareness.

I’m not going to answer personal questions and won’t return to this thread. I feel for the people who are getting screwed by the system and their ex partners, but hope this post has been helpful to some.

So glad to hear that @Sweetheart7. Really happy to hear this thread has helped you move towards getting fair financial input for your children. All parents should be equally responsible for financial input to their own children, not just the resident parent (over 90% female). Rooting for you and your children.

@Raindropsonrose “This post was designed to help others” then you go on to speak about “toxic ex wives” and then “toxic men” and then justify why self employed and Ltd Company Directors should not be treated the same as PAYE NRP’s. This is a horrendous loophole in the CMS system where many mothers and children have been left in financial hardship. Forgive me if I’m a little sceptical. I apologise if your male friend is doing his upmost to fairly financially contribute towards his children and has made full disclosure to the CMS about his TRUE GROSS INCOME so that the RP does not have the horrendous stress of a pittance being paid towards their children’s upkeep because he can basically declare whatever he wishes. This has overwhelming been my experience in these cases. Absolutely raise a variation request (you must do that to start the process), and then ask for a mandatory reconsideration (within 30 days of the variation being refused- overwhelmingly, statistically, it will be, so be prepared for that- it’s utterly soul destroying when you know it’s unjust and unfair- but it will most likely happen) then be ready to file an SSC2 form (google it- within 30 days of the refusal of the Mandatory reconsideration). Then go through the tribunal process where the Corporate veil can finally be lifted and the true amount of Gross income calculated.