CM assessment and timings and disclosing information

[FallenFigs]

Can anyone advise on Child Maintenance. We are yet to start the divorce process, but this is imminent, so I just want to ensure I understand the CM process, pros and cons, and how it fits into the bigger legal picture.

Separated last summer. During the prior tax year, 'D'H was earning just off 6 figures. He then adjusted that down during the current tax year to about 2/3rd of that. Earnings are probably still around that. I expect that he is doing the contractor/self employed trick of saying he earns 'x' but topping up with dividends.

He has based CM off in-year earnings and adds £30 on top.

However I have read that actually if I were to go via the CMS process, they look at prior year earnings, so currently he'd be paying based on 2022/2023 earnings (i.e. the higher amount). This equates to about £300/month extra. Then, post-April 2024 he'd pay based on the 2023/2024 tax year and so on.

Is CM actually due when separated but not divorced? Or is he in effect only paying out of 'goodwill' at the moment?

What are the implications of this? My current instinct is that, if he 'should' have been paying the higher rate for 12 months, then I use that as a negotiating tactic, as opposed to actually going after him for it.

Would welcome perspectives on this minefield.

Well technically you could cksim
cms while separated
but you’d also need to consider if he is paying anything else? Eg still paying the mortgage (or share ) on fmh? Having to pay rent elsewhere while you get dole use of fmh? Etc because if that’s the case cms on top may just not be possible and he could stop those

Ok so he's paying half mortgage on FMH. So in that sense it about evens out.

That's useful, thank you.

Do you have a lawyer?
Details about the business (and savings etc) all form part of the financial disclosure. So dividends rather than income can be tax efficient but not for CM.

It depends on how amicable you are. Would he agree to a lump sum when his dividends come through? As you said paying half the mortgage might even things out but what will you do once the family home is sold etc.

@MollyButton Yes I have spoken with a solicitor a little while back. It may be that I agree to set aside anything to do with historical businesses (there is a complex/complicated story here) and just consider the current business.

Can you expand on the point about dividends and CM versus income tax? Thank you.

@barkymcbark the 'evening out' only really applies to the last tax year, as he has subsequently reduced his earnings.

Not very amicable currently. But I do need to consider options for negotiation on this. His earnings (and earning potential) are considerably higher than mine. However, DC are secondary age so I know this is less of a factor. Suggestions on options for how to tackle this welcome!