Stbxh contracting through ltd company…finances

[Waitthenwhat]

My husband earns £1000/day contracting for a bank but all his earnings go through his ltd company and he only pays himself a small amount (~50k/year). My understanding is that he is keeping the money in the company to avoid a big tax bill. Can someone please help me understand how finances are split/seem by court? How is child maintenance calculated? Based on the 50k salary or daily rate?

It will most likely be the salary he is declaring unless you can break through the incorporation. But if the taxman can’t then you are unlikely to do so.

Not what I wanted to hear! :( but at least that will prepare me mentally on what to expect.

Going through the very same thing with my ex. We're currently in mediation as part of divorce and he's been told he has to show all streams of income, including his ltd company finances. He's trying to get away with paying as little as possible by calculating his child maintenance on what he pays himself too rather than daily rate but I'm determined to not let him get away with it! The mediator seemed positive that he'd have to pay more... Apparently they see this a lot so don't give in!

That’s good to hear! Please let m know how you get on @Worakls! They really should pay their fair share for raising the kids.

Will do. It's still early stages and he keeps lying and refusing to produce documents so might be slow progress! It's already been a year since we started mediation. Hardest thing for me is that at the minute I have no spare money at all especially given I'm having to pay for divorce. I work FT now (was PT before the split) and have been promoted but we live in SE and mortgage is nearly as much as my take home pay. So things are tight... The kids go to him for the weekend and he splashes out on crazy stuff ro them and for himself too. It's just not fair knowing he can treat them and himself like this and I struggle to even take them for a day out. Dread to think how I will manage xmas😞. I'm not asking for anymore than they deserve, in fact I'm not even asking for what I deserve, just asking he pays correct level of maintenance.

I live in the SE too! My eldest was telling me how he find it confusing that his dad doesn’t like to spend money but sometimes just spoil him! I live under the same roof with stbxh and it’s exhausting mentally! Clearly he doesn’t want to be with me but then he doesn’t want to pay for the divorce. And so just like you I am left to pick up the pieces. Working full time and just about managing.

Husband is out and left his computer on…can I copy some of the docs he has in there?

I've just gone through something similar - had to go via the CMS.

He declared an income of £10 000 per year (!!!) because he has a limited company and was hiding behind it. In reality his income is approaching £100 000 a year.

You have time to appeal - make sure you do this ASAP because the CMS has a time limit. It took me over a year to get their gears moving - the process is fiendish and I speak as a highly educated, literate person who has English as her first language.

Eventually they managed to track down the HMRC decelerations, "dividends" paid to him etc so now he has had to pay me arrears plus his monthly amount has increased substantially - from £78 per month initially to nearer £700.

You do need to be persistent with the CMS - mine was slowed down by Covid etc as they moved a lot of investigative staff from CMS to deal with the huge increase in universal credit claims.I had to be like a dog with a bone to get a rocket up their arses and get it dealt with.

So just because they have a limited company doesn't mean it can't be done but it's way more tricky and these men unfortunately will go to any lengths to hide income - eg if they pay more into a pension this gets taken off their income etc.

But it can be done - good luck!

It’s mind boggling how men seem to forget they have children post divorce! Good to know that you can contest that through CMS. @Vintagevixen, sorry for my ignorance, but did you need a solicitor to sort the maintenance?

Hi no.

My ex was very unreasonable from the start - was making various low offers and trying to link them to other disputes we had over other finances eg some ISA's etc we had. Making his "offers" conditional on giving him shares of these ISA's etc (we weren't married so I had no claim over his pensions.)

I had to stand my ground and remind him that child maintenance was a separate issue and not reliant on any other financial matters we had to settle.

In the end I just went to child maintenance because there was no point in dealing with him directly - they seem to have sorted it now, saving me a ton of heartache and emotional blackmail from him. So no solicitor was needed - it was all the CMS.

Disgraceful isn't it. Luckily I had carried on working and was able to buy my own place etc so I could manage whilst I waited for the CMS process to grind its way slowly forward, I often think of women and children for whom this is literally the difference between heating and eating.

Worth noting - the CMS will only back date a claim from the date you first make an application - I spent two months trying to negotiate with ex and then went to CMS but I cant claim anything backdated for those two months. Contact them as soon as you can or you will loose time he should be paying maintenance for.

Note this is all child maintenance - they purely act for the child. Any spousal support, asset settlement, house sale etc is still separate and may require a solicitor.

Got you! Thanks @Vintagevixen for all the above. Stbxh is still living with us atm but will put a claim to CMS as soon as he moves out. There is no point negotiating with him as he is v unreasonable!

Sounds very much like my ex! These guys will NEVER be reasonable - I've learnt the hard way. And yes you can't claim while living in the same household, but from the day you are separate households.

Had to live with him for a good while too until he agreed to sell the house - but that is a whole other thread and a whole heap of different legal advice!

When you put in a claim to CMS, they contact HMRC who will check what he out on his last tax return. He will have to have declared salary and dividends . AFAIK They will both be counted as his income, not just his salary.

I’d put the claim in now - why wait ? As a PP said, they don’t backdate it.

Re your divorce - his shares in his company, any money in the directors loan account ( assuming he’s the only shareholder ) and his pension are matrimonial assets - he will have to declare these as part of the divorce. Your solicitor should be all over this.

Have you downloaded his accounts from company house? It might only be the abbreviated ones.

Do not even THINK of divorcing a man like this without engaging a good solicitor. They should pay for themselves many times over.

I bet you and your children are entitled to far more than you think.

Thank you so much @R0SEMARY for the insights. That’s v helpful! So when you say I need to engage a solicitor, do you mean for the whole process or just the financial settlement bit? I did download his accounts from company house but I will need someone to sit me down and explain it all to me! Unfortunately, I don’t think there is lots to share (he is v secretive so perhaps he is hiding money somewhere?) but he also lost most of our savings in trading (I am talking 500k+!!). Not sure if that will be considered when dividing the assets?

Grr men like this need a good slap.

Im in a similar position as my stbxh contracts through his ltd company, however he's been pretty okay financially. Still pays the mortgage, puts money on kids spending cards, cleared the joint account overdraft and helps out if I need it.

I run his business accounts so if needed I could prove all income but so far I haven't had to resort to it. I'm also a director on the company now so I can also take dividends which helps on the tax front.

Get as much evidence as you can, when you can and get good legal support.

@Waitthenwhat

Thank you so much *@R0SEMARY* for the insights. That’s v helpful! So when you say I need to engage a solicitor, do you mean for the whole process or just the financial settlement bit? I did download his accounts from company house but I will need someone to sit me down and explain it all to me! Unfortunately, I don’t think there is lots to share (he is v secretive so perhaps he is hiding money somewhere?) but he also lost most of our savings in trading (I am talking 500k+!!). Not sure if that will be considered when dividing the assets?

I doubt your solicitor will be able to use these if they weren’t obtained with his permission. They would have to be handed over to his legal team.

Accounts at Companies House are in the public domain. So please disregard the previous poster.

Thanks @FinallyFluid for clarifying. That’s what I thought, but any details about other income or assets will need to come directly from him right?

Don’t disregard what I said. If the OP is taking information from his computer, then she won’t be able to use it.

That different from public accounts which are a form of a company accounts.

Noted, thank you!

Lost your savings or hiding them?

Lost your savings or hiding them?

This! In your situation, I'd speak to a really good solicitor for advice - you can then decide what to do. You may need a forensic accountant to deal with it all. It wouldn't be cheap but could be well worth it.

Personally, yes, if you can I'd look at or copy anything on his computer but be aware you may not be able to use it (a solicitor would be able to help).

@Starlight39, sadly he actually gambled all of it away in the stick market! So it’s gone. But he might have saved some money in the last 5 years (you would hope!)

Stock*