CMS. Ex gone self employed

[WhereHasSpringSprungTo]

And says the first year hes not earning an income just building the business. Equipment, transport, advertising.
He says hell only be able to draw the
Bare minimum to live on

Its a ltd company with his DW. Ds said that the step mum will draw a decent wage whilst everything else just goes back into the business.

How will this work as i believe he doesn't have yo declare the annual income for a year?

Can he just say 'i earn £150'a week that's it and cms go from that.
I've only got 2 year left of dealing with cms so no doubt I'll have to just suck it up

Until the CMS recalculate his payments, he must continue paying at the current rate.

If his wife is not working for the business or is being overpaid for her work, that is diversion of income. If that is the situation, you will be able to apply for a variation once they have recalculated his payments. You can also apply for a variation if he has set up a limited company and is paying himself a significant amount as dividends.

Having said that, most startup businesses make little or no money for the first year or two, so you may have to accept that you will get very little child maintenance.

Thank. Ds said she's doing the administration side of it. Hes doing the physical work. She's doing the booking of jobs quotes etc.

He will have a basic wage.she will have a decent wage. Unsure on dividends.

I have 2 years left so may just suck it up.

@prh47bridge

Until the CMS recalculate his payments, he must continue paying at the current rate.

If his wife is not working for the business or is being overpaid for her work, that is diversion of income. If that is the situation, you will be able to apply for a variation once they have recalculated his payments. You can also apply for a variation if he has set up a limited company and is paying himself a significant amount as dividends.

Having said that, most startup businesses make little or no money for the first year or two, so you may have to accept that you will get very little child maintenance.

+1.

"Can he just say 'i earn £150'a week that's it and cms go from that."

It has to match his tax return. So he will have to either be truthful to CMS or lie to HMRC - which can land you in prison.

He would probably lie to hmrc. And genuinely only take a smaller wage. Then his dw take larger

@mrziggycoco

"Can he just say 'i earn £150'a week that's it and cms go from that."

It has to match his tax return. So he will have to either be truthful to CMS or lie to HMRC - which can land you in prison.

It doesn't have to match his tax return. A new business will not yet have filed a tax return. Assuming the company started trading on 1 March the first accounting period is likely to end on 28 Feb 2023. The company will have to file a return to HMRC on 31.1.24.

Meanwhile he will take an income from the company - probably enough to be a NI credit but not enough to pay tax. He'll take things like use of home as office, and the bulk of income will be taken as dividends. Wife will receive a salary of she is working for the company, and may also be a shareholder.

There is much for the CMS to unpick, and this might end up in the Tribunal, but OP should rest assured that the Tribunal deals with these kind of cases all the time.

@Collaborate in a similar position. Ex had well paid job for last 2 years which meant I was receiving a lot in maintenance which helped massively after being made redundant during lock down. He then quit his job to set up business and told the CMS he earning £140 per week! My payments went from £800 to £60 per month! It’s an absolute joke, especially when he doesn’t even take child on a day out or treat him when he sees him. This has been going on since August last year, company clearly doing well as he has about 5 employees and recently posted an ad for a full time vacancy due to expansion. It’s all about financial control with him, as theres a history of DV, but my son is the one being harmed. What tribunal could I go to? I’ve not asked CMS to look at dividends as I’m not sure they’ll be anything on record yet? I don’t know how often they will look, assuming it’s only around time of annual reviews? Sorry you’re going through this too OP!

We are in a similar situation but on the other side - my husband has set up a new company and is building the business, and is planning to keep all the money in the business for a couple of years (not diversion/game-playing - huge capital outlays involved in getting started). We can afford to live entirely on my income (I am employed 3 days a week in a conventional job - not employed by DH!), so he does not pay himself a salary and doesn't plan to until the business is well-established, which may take several years. So as he earns nothing, no child maintenance is payable to his ex. We have made it clear that we are happy to give her a monthly payment out of my income, but she doesn't want my money (she is a high earner and is managing to give the children a good lifestyle without any CMS). Clearly lots of men engage in game-playing, but as others have said, often new businesses make little or no profit for several years while being established. As the legally-qualified people on this thread have pointed out, if it's diversion, there are mechanisms for picking up on that, but if he genuinely does not have an income, he can't pay you from money he does not have.