It's a child maintenance, limited company one

[Stressymadre]

I posted this in AIBU but they suggested trying here... i shall try and cut a very long story short! Been separated from my exH for approaching 6 years. I divorced him - he cheated multiple times. It took us until a year ago to actually get divorced. He runs his own limited company (he is the only employee though so this a front to avoid the IR35 regs and means he pays less tax) and this caused issues as he lied about his actual income throughout the divorce. He earns a HUGE amount (I know his day rate) and he eventually he agreed to pay child maintenance at the agreed government minimum level, for a percentage of his actual day rate salary and this was put in the court order. This court expires in two weeks and he has just told me that he will not be paying this anymore.
I said I will go via CMS but he knows they only care about his declared income (he spends money directly from his company so he can pay himself less). He has offered to pay a level lower than the amount he should be, even for his supposed, declared income and has said if I challenge it, he will reduce his salary. He has actively stated he will be working to reduce his salary as much as possible over the coming months (I know he has recently added his GF to the company so I assume he plans to pay her, so that he can not pay himself much). Is there anything I can do or has he got away with it???

I think you can ask CMS to look at company accounts and dividends taken to be assessed as part of the overall award? I know this happened to a friend of mine and her original low award based on his ‘salary’ was significantly increased.

Thank you for replying. I spoke to CMS this morning and they said there is nothing they can do as they can only go off the information he gives HMRC so the fact he is hiding income and diverting his income to his GF means they can't get involved

CMS can do a variation to look at his full income. You may have to push them hard to do it though.

Also if he's genuinely fiddling the IR35 thing you could report him to HMRC, then claim CMS after that.

You can report him for fraud to child maintenance

CMS won't do anything. They'll look at HMRC only. If he's lying to HMRC, then that's an issue with HMRC unfortunately

HMRC will take this seriously because there cracking down on this kind of fraud.

As a limited company, he (or his accountant) will need to file annual accounts with Companies House. These will show you dividends paid and/or declared for that financial year. You can also check the names of Directors (e.g. the GF) and the accounts will include any dividends paid to them.

Assuming he isn’t fiddling his accounts.

Note that having a limited company doesn’t mean avoiding IR35. Most contractors fall within IR35 these days and while there are still benefits to having a limited company, financially/fiscally it is much less lucrative than it used to be. But if you think his work does actually fall within IR35 and he’s claiming he’s outside it, definitely report him to HMRC.

Micro company accounts don't show dividends. So you probably can't see the dividends there.

Small company accounts won’t show dividends. Also, director and shareholder (to whom dividends are paid) are not the same thing.

You need to apply for a variation on the grounds that he is receiving dividends. You will need to push CMS to do this.
if CMS won’t do this then contact your MP and they can assist

Ah this makes sense as I have looked and the micro accounts show nothing...

We don't currently go via CMS as he has been paying under court order. So I can't ask for a variation unfortunately. I guess I put the claim into CMS then ask for a variation in a few months?

Small LIMITED company accounts now have dividends reported in the retained earnings section of the balance sheet, showing the reduction in retained profits due to the dividend payment.

As both a Director and shareholder of several limited companies (of varying sizes), as well as a ex-Big Four chartered accountant. I’m very aware of the difference thanks very much. But thanks for the patronising comments. I was trying to keep things very simple for the OP but there’s always someone on MN who likes to be a dick.

I’m so sorry you’ve got one of these.

Second getting your MP involved. They do a lot of casework on issues like this, and csn intervene with the CSA if needed.

Other than this, I can’t offer practical advice on how to actually extract money but my one piece of advice is to not hide the father’s failure to pay from the child in any way, once they are of an age to understand.

I am not suggesting slagging off the father, but just, not lying or minimising, if and when your child asks questions, which they may well do in future.

Ultimately, being more direct and honest with kids might make it less socially acceptable for men to shirk their responsibilities: for too long women have had to do the ‘be nice’ nonsense because they’re told if they even mention any factual information about the other parent’s behaviour, that’s “parental alienation” or “undermining the kids’ bond with their dad” or “making the kids feel stuck in the middle”. I don’t agree with this, It’s just more making women feel responsible for solving problems caused by males.

Sorry! Rant over.
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Check your court order and get proper advice. Whilst he can go to CMS, if it's beneficial to him, a year and a day after it was made in some cases you can go back to court.

I used to know someone whose ex bounced them back and forth every year, but it depends on the specifics of the each case.