To question CS payment amounts?

[WhatJustHappened9]

Hi,

Just pondering this and wanted some well rounded opinions. I’m not intending to raise this with the ex (at the moment anyway) due to high conflict reactions.

A few years ago, my ExH “left” his employed job. He then went self employed and reduced the monthly CS amount. No problem, I understand and I managed the shortfall.

The amount has then not changed for a number of years. He’s had these years to build up this business yet not given himself any kind of salary increase if the payments are true to his earnings. For context, he doesn’t contribute towards eg school uniform, shoes, it’s the basic CS payments.

Do you think I’d be unreasonable to question this and to think that you’d expect it to have increased even by a bit over those years?

Also for context, whenever there has been reason to reschedule his time with the children it’s always a struggle to rearrange with him as he is “very busy with work” which implies it’s going great.

Thank you for reading

The child support agency or whatever it’s called now so an annual review to make sure the payments are correct .
if you’re not using them - I suggest you should .

You can ask CMS to review but it's very easy for self employed deadbeats to get away with paying hardly anything. Don't hold your breath.

Do you have any reason to think he's evading tax? HMRC are much more interested in investigating than CMS.

Have you looked at business performance on companies house?

Yeah I had a quick look but couldn’t see a great deal.

Thanks for the comment, and no reason to believe there is any tax evasion going on.

There is if he's claiming he doesn’t earn very much so he pays less child support.

If he tells HMRC he earns £20k and he pays child support on that basis, he also pays tax based on that figure, which means he's evading tax if he really earns more.

I think you can report him based on his lifestyle not fitting what he says he earns.

If he says he earns £20k but he has a flash car, gadgets. eats out, nice clothes, pays his housing costs and bills etc and is 'busy with work' then that indicates that he's likely earning more than he admits to.

Yeah I get what you’re saying, but the reason I have no reason to think this is because from the little info I know, it’s a limited company (likely with an accountant) so he will be an employee, so it will all go through PAYE where tax etc is taken automatically. He just won’t have increased his salary which I just think is a bit weird. Maybe my OP shouldn’t say “self employed” as I’m thinking that’s not the same is it? Sorry for the confusion.

I’m also wary that I could be completely off the mark and he has actually overpaid CS in the earlier years and this is now right.

If he had a Ltd company he can pay himself whatever salary he wants. He can keep the salary low which keeps tax (and your CMS payments) low, and pay himself in expenses, dividends etc, which are taxed differently, and not counted for CMS, ordinarily.

Really? See it’s some loophole like this that has been niggling at me. Above board legally, but morally, rather a crappy thing to do in terms of supporting his children.

Cms won’t do nothing, your only option is tribunal. My self employed ex had a ‘nil’ assessment as he claimed he didn’t have an income. Cms said there was nothing they could do for years as they went off of tax returns and HMRC records. After appealing so many times, I went to tribunal where they caught him out on his lies. They realised that him leaving alone and not having savings, benefits or an income meant he had been lying. So they came up with a figure of his job role in our local area and based his income off of that (which is likely less than what he earns but it’s something). He’s now £5k in arrears as they backdated it too.

my only issue is that they don’t even have the power to get parents to pay. He has refused to pay, they put him on a deductions of earning order (aka went to his employer) and the employer is refusing to co operate. So even if you ‘win’ and get a schedule of pay including arrears, there are so many loopholes for them to continue to avoid paying.

I wish we had powers like in America where it would be ‘pay or we’ll take your driving licence’ or threaten with fines and imprisonment. We’re so lax as a country and practically enable deadbeats

Aw Im so sorry you had to go through this. What goes on in some people’s heads?!

The more I think about it, my ex using some of the legal loopholes kind of makes sense in the situation and him not increasing salary, which stinks really as it’s his children at the end of the day. A few years ago when it dropped is a lot different to now with the increased cost of living!

The thing is, any accountant specialising in preparing accounts for limited companies will advise clients to structure their earnings in this way. It’s tax-efficient and completely legal.

The issue is the CMS only look at salary, which for company directors is not a fair reflection of their overall income.

Does cms take dividends into account?

No idea