Ex H, 'self employment' and P60s

[FamilyFirstAlways]

In brief, Ex H is contracting but has set up his own company in which he deposits his earnings from his employer and then claims a salary from. What he claims is a fraction of what he actually earns, but he is using the amount he chooses to pays himself to calculate what he should be paying in child maintenance. I am taking issue with this via the solicitor - I think the CM should be calculated from his earnings from his employer. If I went to the CMS and they ask for his P60, would it evidence his earnings from his employer or from what he declares through his business? He refuses to disclose his company accounts, but the solicitor is onto this. He is expensive, but good, and I want to weigh up financially what's best for me and the girls. ie do I go down the court/judge route or simply go via CMS.

He is a very high earner, which is not reflected in the amount he chooses to allocate to his kids

Thanks

Assuming he is not breaking the law, if he works through a company, he will not have a P60 from his client (who is not his employer legally speaking).

I assume he is paying himself a small salary from the business and the rest in dividends - whihc is tax-efficient

this suggests the dividend income is not included in the CMS calculation, so it appears court is the only viable option.

I wonder whether HMRC would be interested in the fact that he is actually not self employed as he only works for one company.
It's a well known tax dodge I believe

If he is contracting to only one company, doing the same job as before, he is likely to fall foul of the IR35 legislation. HMRC may well be interested.

Dividend income would fall into the "unearned income" bit, which, as caroldecker's link states, can be used as part of the calculation.

OP - you'll have to apply for a variation for the dividends to be taken into account. Also apply on the ground of deliberate deprivation of income, as he may be unnecessarily retaining income in the company.

Thank you. Not as clear cut as I thought. He has access to a lot more accountant-savvy people than I understand and can ever afford but your advice is really helpful. Judging by his past behaviour, I very much doubt he is operating within the limits of the law.

there are a lot of account savvy people on here and we are here to help - pm me if you want me to look at more details of his situation

If you appeal the variation decision to a tribunal there will usually be a trained accountant as one of the appeal judges. V helpful.