CMS & redundancy

[LDA123]

Hi,
My ex is threatening to adjust our agreed monthly CM amount as no longer has a job (but is now self employed running a small business). We have a private agreement and don’t go through CMS.

I’m wondering where I stand with regards to a payout from his old job? Would CMS treat this as income for child maintenance purposes? He paid £44k tax on the amount.

He is arguing that as no longer has a job - although now running a business - he can reduce this CM. Prior to leaving job/setting up business, he was a higher rate tax payer earning £100k+

Finances are tight for me and the kids, we survive on my salary and his CM. If he reduces CM, we would struggle.

I know if you lose your job, you can apply for a variation to reduce CM. But what happens if received a big lump sum up front that was taxed?

Redundancy won’t be counted for cms
and as he’s self employed they’ll go by what fe declares as his income

you’d have to start seeking variations and investigations to get dividends etc included which could be a hard ( often fruitless) battle

what’s he cutting it from to?

Even if he paid £44k tax on the redundancy?

Redundancy pay doesn’t count in cms calculations so there would be a nil assessment on that

It won’t be included in an initial assessment, as it is taxed like income. You may have to apply for variation based on him have assets over 31k. Then it depends what he has done with it. If it is in a savings account they will assume an income based on 8% of the value.

If he has put it into his business it’s probably excluded from this assessment. You will need to find out. Have you tried meditation?

This^

Redundancy isn't taken into account for CMS.

The issue with self employment, is the person can pay themselves a very low wage and have divides instead, which means on paper, they earn a lot less, which in turn will impact how much CMS you get.

Meant to say redundancy isn’t taxed like normal income. It is taxed just not in a way that means it counts as income for an initial CMS calculation.

Based on the tax paid he probably got maybe c100k cash. I could be generous here. If that is in savings a variation would calculate an income of 8k per year from that amount. That would be income for CMS purposes. But I think, you need to check, assets held as part of a business are excluded.