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Original poster

Ex husband and Tax credits?

31 replies

Lilaloves · 01/03/2015 11:14

Hi,Can anyone help me out here?

I am separated and in process of divorcing.I am a sahm to two dc.Ex husband is self employed/Sole trader.
At solicitors meeting it was requested that I look into claiming benefit as have never received any benefits apart from standard child benefits.

Looks like I am going to receive £400 in tax credits.At second solicitors meeting they are now saying I will have to accept a lower offer in monthly spousal support from exdh as I am now better off due to the tax credits.I really don't see why I should have to receive benefits if exdh can afford to pay?

Exdh is also claiming he only earns 30 thousand a year,which I very much doubt,but as he is self employed he can pay himself a very low salary to keep money within his business.

So my question,if he maintains he earns a low income can I not request he claims benefit also? Would he be eligible? Earing 30 thousand a year?
Thanks

OP posts:
Original poster
lilaloves · 01/03/2015 11:22

As he is not the resident parent he probably doesn't qualify for anything? He now lives with his partner and her child, could they claim as a couple for her child? Sorry if I'm not making any sense?!

OP posts:
TickleMyTitsTillFriday · 01/03/2015 11:26

If he's saying he only earns 30,000 a year then you won't get much in spousal support anyway I'm guessing?
But no, tax credits should not be taken into account as it's likely to change and therfore can't be relied on.

No he wouldn't be eligible to benefits earning 30,000. Did you know that a couple with one child won't get tax credits once the family income goes over 25,000?! Why on earth would he be entitled to benefits?!

gallicgirl · 01/03/2015 11:26

He wouldn't be eligible for anything on that income.

However, self-employed income is very manipulable if you see what I mean.
But you shouldn't be encouraging him to claim anything he's not entitled to.

As for spousal support, he should be paying you a decent amount as agreed between solicitors and THEN you claim benefits if required. Tax-funded benefits are not there to allow your ex to maximise his income/reduce his outgoings.

HoppityVoosh · 01/03/2015 11:28

No I don't think he'll qualify for tax credits. I think the threshold for child tax credits is around 26k so he earns above that. I'm not sure how that'd make a difference to you anyway if he claimed tax credits or not.

Babyroobs · 01/03/2015 15:39

Only one of you can claim tax credits and child benefit for your children and that is usually the parent they mainly reside with.

Original poster
lilaloves · 01/03/2015 17:54

They are proposing cutting the spousal support as I am now able to receive tax credit instead, I don't think its fair if he can afford to pay it.
As I said earlier he is claiming he can't afford to pay me spousal support due to his low income,
But his income is only so low as he pays himself the bare minimum and keeps the money within the company.He could pay himself much more,but on paper it looks like he is just scraping by.

OP posts:
Original poster
lilaloves · 01/03/2015 17:58

They are proposing cutting the spousal support as I am now able to receive tax credit instead, I don't think its fair if he can afford to pay it.
As I said earlier he is claiming he can't afford to pay me spousal support due to his low income.Spousal support including child maintenance comes to £1500 a month.
But his income is only so low as he pays himself the bare minimum and keeps the money within the company.He could pay himself much more,but on paper it looks like he is just scraping by.

OP posts:
MirandaWest · 01/03/2015 18:10

That is a large amount for maintenance - I just get child maintenance of about £350 a month for two children - XH earns about £45k. I've never had any spousal maintenance

Original poster
lilaloves · 01/03/2015 18:15

As far as I'm aware the spousal maintenance will only continue for 3 years max

OP posts:
Original poster
lilaloves · 01/03/2015 18:20

It just doesn't seem fair that he will probably get to reduce his payments to me as I can receive benefit instead

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HoppityVoosh · 01/03/2015 18:27

That seems an extraordinary amount of child and spousal maintenance. 30k a year is what, about £2100 a month after tax? And he is meant to give you £1500?

bobs123 · 01/03/2015 18:31

Why should it matter if you get the same amount whoever pays? However best to check whether your tax credits are based on the old system or Universal Tax Credits which will soon be the norm for all. I get Tac Credits based on the old system but would get nothing under the new system

PS £1500 is a lot of money for someone from someone who earns £30K pa. It all comes down to reasonable needs - does this leave you enough to live on? I would be happy with that!

mummytowillow · 01/03/2015 18:34

Tax credits shouldn't be taken into account.

If he and his lawyer are pressuring you to accept less, tell them you'll get child maintenance options to decide how much you get.

He gets no choice, they decide based on earnings so it's easier if he just agrees an amount with you.

bobs123 · 01/03/2015 18:34

In fact the more I think about it the more gobsmacked I am that you are being offered so much!!

mummytowillow · 01/03/2015 18:38

I also don't agree with spousal support. Why can't you work and then get child maintenance.

I'm single parent, work 25 hours a week and get £350 a month for one child.

Things can't and don't remain the same when your a single parent. If you didn't work before, you can't expect to be at home and he pays you to do this as well as CM. You need to work!

Original poster
lilaloves · 01/03/2015 18:42

That's what I'm trying to explain he doesn't actually earn 30k a year,he has a company with a multi million pound turnover,he just pays himself very little on paper.

Tax credits do not take into account any maintenance paid by my dh,I have phoned twice to check this.

I suppose everyone is different but £1500 a month does not leave a lot to live on every month once bills,food,car payments are made.
I will only receive this payment for max 3 years then just the child support of £400 a month.
We are mortgage free so he doesn't pay anything towards the family home.
He lives with his girlfriend now so pays nothing there either apart from contributing to food

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mummytowillow · 01/03/2015 18:46

Do you work though, you can't expect him to 'pay' you to stay at home!

Original poster
lilaloves · 01/03/2015 18:50

Bobs123,I'm sorry that you think It's alot,I suppose it depends on your circumstances.

Spoual support was suggested due to the fact I had given up my career to be a sahm,supported and helped set up the business and my non financial contributions during the marriage.

As I said the business has a multi million pound turnover,I believe I am entitled to something after the years of building up his business

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LaurieFairyCake · 01/03/2015 18:54

If he has a multi million pound turnover then he's likely got a lot more money

He will owe more than £400 a month for child support

What does your solicitor say? You need a forensic accountant as it must be possible to sell the business and you be paid what you're owed.

Original poster
lilaloves · 01/03/2015 18:54

He was happy to pay me to be a sahm when we were married? I was employed through his business,and recieved £900 a month as a tax loophole,that's not an option now we are separated

OP posts:
Original poster
lilaloves · 01/03/2015 19:01

My solicitor has requested an independent accountant goes through his figures/books,we need to value the business.He had suggested we use his own accountant,I don't think so!?
People might think he is paying me a large amount,but its only a fraction of what he could actually pay.The payments to myself need to be calculated on his business value not what he pays himself,as I said he pays himself a very nominal amount,all his payments to myself and dc are only calculated on what he discloses,if he decides to pay himself 25k he can,but its not representative of his true earning potential

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LaurieFairyCake · 01/03/2015 19:05

You should still be paid the 900 as you work there. Ask your solicitor about this.

It's obviously not a loophole as you wouldn't be involved in fraud. You work from home doing paperwork. Wink

Original poster
lilaloves · 01/03/2015 19:16

Of course! Paperwork and researchSmile No,I did play a big role in starting the business even if it was behind the scenes

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Original poster
lilaloves · 01/03/2015 19:22

He is paying me 900 spousal maintenance in lieu of the 900 I would have been earning from his business,he has removed me from his books,plus 400 child maintainace,plus 200 towards property renovation that we were undertaking before he ran off with the ow.

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bobs123 · 01/03/2015 21:38

I'm not meaning to be rude or nasty lila, rather as Hoppity said, that would leave him with £600 net to live on, so payments to you seemed excessive in comparison with what he gets.

Hmmm £900 spousal from his take home pay as opposed to £900 pay which is tax deductible? Interesting as that costs him more!

I think getting his books looked at is a very good idea.

The turnover is immaterial - it's the profit that the business generates that is important. Of course he will have it ear-marked for development or whatever - the problem with an X with his own business unfortunately