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Help calculating maintenace
#1
Hello,

I would be grateful if someone could please advise me.

I've visited the child maintenance calculator page on the gov.uk website but i have become stuck.

I am a IT contractor and have my own company which I am the sole director of.

So I am not sure what to answer to the question 

What is your weekly gross income?

please can someone help?
Reply
#2
(08-24-2016, 09:29 AM)nilbo Wrote: Hello,

I would be grateful if someone could please advise me.

I've visited the child maintenance calculator page on the gov.uk website but i have become stuck.

I am a IT contractor and have my own company which I am the sole director of.

So I am not sure what to answer to the question 

What is your weekly gross income?

please can someone help?

I am also Self Employed, so I had to look into this myself.

In this situation, its your business net profit for the last tax year, divided by 52 to get your weekly gross income.

What you pay yourself, or any allowable for tax expenses you claim back do not come into it.

In 2016/17, your Child Support will be based on your last tax year, so 2015/16. Because the law does not make you file until well after the start of the tax year, until the amount is know, you need to use the year before amount, or it your income has gone up, its better to estimate it.

Once the Self Assessment is done, you then need to work out how much you should pay over that tax year, and take off what you have already paid (so like what payments you have made on account), and then amend you payments so that the correct amount is paid over the rest of that tax year.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
Reply
#3
thank you Mark!
Reply
#4
(08-24-2016, 09:54 AM)nilbo Wrote: thank you Mark!

I spoke to CMS about this option last night.

They confirmed (although the person I spoke to struggled several times to explain it and had to get the help of a colleague, so lord knows if it's actually correct) that their calculation based on the Companies "profit" after all expenses.

So it doesn't sound like this route is any better than being a PAYEr.

Anyone experienced enough in here to define expenses and what can be done to reduce gross earnings?
Reply
#5
(08-26-2016, 08:00 AM)Stan the man Wrote:
(08-24-2016, 09:54 AM)nilbo Wrote: thank you Mark!

I spoke to CMS about this option last night.

They confirmed (although the person I spoke to struggled several times to explain it and had to get the help of a colleague, so lord knows if it's actually correct) that their calculation based on the Companies "profit" after all expenses.

So it doesn't sound like this route is any better than being a PAYEr.

Anyone experienced enough in here to define expenses and what can be done to reduce gross earnings?

Its the amount of net profit on your Self Assesment (the amount you have to pay tax on) what they use. Regardless of if you keep money in the business as "Retained Profit", for Child Support, that fact that profit exists means its considered.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
Reply
#6
(08-26-2016, 08:21 PM)MarkR Wrote:
(08-26-2016, 08:00 AM)Stan the man Wrote:
(08-24-2016, 09:54 AM)nilbo Wrote: thank you Mark!

I spoke to CMS about this option last night.

They confirmed (although the person I spoke to struggled several times to explain it and had to get the help of a colleague, so lord knows if it's actually correct) that their calculation based on the Companies "profit" after all expenses.

So it doesn't sound like this route is any better than being a PAYEr.

Anyone experienced enough in here to define expenses and what can be done to reduce gross earnings?

Its the amount of net profit on your Self Assesment (the amount you have to pay tax on) what they use. Regardless of if you keep money in the business as "Retained Profit", for Child Support, that fact that profit exists means its considered.

Net profit / retained profit I get but what if you wanted to lump all of this into your pension (as you can have up to £40k per year). Can they stop you from doing this?

I'm thinking the only way to get around this problem is by going self employed as at least you have expenses you can claim for which reduce your "earnings".
Reply
#7
(08-30-2016, 11:00 AM)Stan the man Wrote:
(08-26-2016, 08:21 PM)MarkR Wrote:
(08-26-2016, 08:00 AM)Stan the man Wrote:
(08-24-2016, 09:54 AM)nilbo Wrote: thank you Mark!

I spoke to CMS about this option last night.

They confirmed (although the person I spoke to struggled several times to explain it and had to get the help of a colleague, so lord knows if it's actually correct) that their calculation based on the Companies "profit" after all expenses.

So it doesn't sound like this route is any better than being a PAYEr.

Anyone experienced enough in here to define expenses and what can be done to reduce gross earnings?

Its the amount of net profit on your Self Assesment (the amount you have to pay tax on) what they use. Regardless of if you keep money in the business as "Retained Profit", for Child Support, that fact that profit exists means its considered.

Net profit / retained profit I get but what if you wanted to lump all of this into your pension (as you can have up to £40k per year). Can they stop you from doing this?

I'm thinking the only way to get around this problem is by going self employed as at least you have expenses you can claim for which reduce your "earnings".

A lot of the things you can claim for being Self Employed, you can if employed doing the same job. The only differance is with Employed, its other forms you fill out, and a bigger chance of being asked for reciepts etc.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
Reply
#8
(08-30-2016, 05:13 PM)MarkR Wrote:
(08-30-2016, 11:00 AM)Stan the man Wrote:
(08-26-2016, 08:21 PM)MarkR Wrote:
(08-26-2016, 08:00 AM)Stan the man Wrote:
(08-24-2016, 09:54 AM)nilbo Wrote: thank you Mark!

I spoke to CMS about this option last night.

They confirmed (although the person I spoke to struggled several times to explain it and had to get the help of a colleague, so lord knows if it's actually correct) that their calculation based on the Companies "profit" after all expenses.

So it doesn't sound like this route is any better than being a PAYEr.

Anyone experienced enough in here to define expenses and what can be done to reduce gross earnings?

Its the amount of net profit on your Self Assesment (the amount you have to pay tax on) what they use. Regardless of if you keep money in the business as "Retained Profit", for Child Support, that fact that profit exists means its considered.

Net profit / retained profit I get but what if you wanted to lump all of this into your pension (as you can have up to £40k per year). Can they stop you from doing this?

I'm thinking the only way to get around this problem is by going self employed as at least you have expenses you can claim for which reduce your "earnings".

A lot of the things you can claim for being Self Employed, you can if employed doing the same job. The only differance is with Employed, its other forms you fill out, and a bigger chance of being asked for reciepts etc.

Could you provide some examples as there are far more advantages of being self employed vs being on PAYE on a permanent basis?
Reply
#9
(08-31-2016, 10:28 AM)Stan the man Wrote:
(08-30-2016, 05:13 PM)MarkR Wrote:
(08-30-2016, 11:00 AM)Stan the man Wrote:
(08-26-2016, 08:21 PM)MarkR Wrote:
(08-26-2016, 08:00 AM)Stan the man Wrote:
(08-24-2016, 09:54 AM)nilbo Wrote: thank you Mark!

I spoke to CMS about this option last night.

They confirmed (although the person I spoke to struggled several times to explain it and had to get the help of a colleague, so lord knows if it's actually correct) that their calculation based on the Companies "profit" after all expenses.

So it doesn't sound like this route is any better than being a PAYEr.

Anyone experienced enough in here to define expenses and what can be done to reduce gross earnings?

Its the amount of net profit on your Self Assesment (the amount you have to pay tax on) what they use. Regardless of if you keep money in the business as "Retained Profit", for Child Support, that fact that profit exists means its considered.

Net profit / retained profit I get but what if you wanted to lump all of this into your pension (as you can have up to £40k per year). Can they stop you from doing this?

I'm thinking the only way to get around this problem is by going self employed as at least you have expenses you can claim for which reduce your "earnings".

A lot of the things you can claim for being Self Employed, you can if employed doing the same job. The only differance is with Employed, its other forms you fill out, and a bigger chance of being asked for reciepts etc.

Could you provide some examples as there are far more advantages of being self employed vs being on PAYE on a permanent basis?

I had a chat with an accountant re Child Maintenance. Their response is below:

With regards to child maintenance, naturally we can’t advise on the legal aspects of any arrangement that you’ve come to, more of a matter for a legal specialist however from an assessment/financial perspective we can certainly assist.  When assessing the amount due, it does help to a certain extent that you are through a limited company.  Initially the assessments are based on the salary and then dividends drawn from the company (i.e. your personal income).  It is possible that they can lift the corporate veil and assess on the profits of the company (if you’re the sole director/shareholder) however more often than not they tend to be happy to remain within the personal income on the grounds that you’re separate from the company which must maintain separate funds in order to finance growth and maintain payments for expenses.  This is something we’d be more than happy to work with you to assist.

 

(09-02-2016, 09:57 AM)Stan the man Wrote:
(08-31-2016, 10:28 AM)Stan the man Wrote:
(08-30-2016, 05:13 PM)MarkR Wrote:
(08-30-2016, 11:00 AM)Stan the man Wrote:
(08-26-2016, 08:21 PM)MarkR Wrote:
(08-26-2016, 08:00 AM)Stan the man Wrote:
(08-24-2016, 09:54 AM)nilbo Wrote: thank you Mark!

I spoke to CMS about this option last night.

They confirmed (although the person I spoke to struggled several times to explain it and had to get the help of a colleague, so lord knows if it's actually correct) that their calculation based on the Companies "profit" after all expenses.

So it doesn't sound like this route is any better than being a PAYEr.

Anyone experienced enough in here to define expenses and what can be done to reduce gross earnings?

Its the amount of net profit on your Self Assesment (the amount you have to pay tax on) what they use. Regardless of if you keep money in the business as "Retained Profit", for Child Support, that fact that profit exists means its considered.

Net profit / retained profit I get but what if you wanted to lump all of this into your pension (as you can have up to £40k per year). Can they stop you from doing this?

I'm thinking the only way to get around this problem is by going self employed as at least you have expenses you can claim for which reduce your "earnings".

A lot of the things you can claim for being Self Employed, you can if employed doing the same job. The only differance is with Employed, its other forms you fill out, and a bigger chance of being asked for reciepts etc.

Could you provide some examples as there are far more advantages of being self employed vs being on PAYE on a permanent basis?

I had a chat with an accountant re Child Maintenance. Their response is below:

With regards to child maintenance, naturally we can’t advise on the legal aspects of any arrangement that you’ve come to, more of a matter for a legal specialist however from an assessment/financial perspective we can certainly assist.  When assessing the amount due, it does help to a certain extent that you are through a limited company.  Initially the assessments are based on the salary and then dividends drawn from the company (i.e. your personal income).  It is possible that they can lift the corporate veil and assess on the profits of the company (if you’re the sole director/shareholder) however more often than not they tend to be happy to remain within the personal income on the grounds that you’re separate from the company which must maintain separate funds in order to finance growth and maintain payments for expenses.  This is something we’d be more than happy to work with you to assist.

 

I also got this response to (I've sought the advice from a few accountants):

In terms of Child Support Payments, if the money does not leave the company it is not technically your money, it is the companies money. However because you would be the only director it is a very close relationship you have with the company, it may be deemed, if investigated that any money held as profit in the company could be liable for the calculation on CSA  – each circumstance is treated on its own merits and your dedicated accountant would be able to advise on the best possible course of action.
Reply
#10
(09-02-2016, 09:57 AM)Stan the man Wrote:
(08-31-2016, 10:28 AM)Stan the man Wrote:
(08-30-2016, 05:13 PM)MarkR Wrote:
(08-30-2016, 11:00 AM)Stan the man Wrote:
(08-26-2016, 08:21 PM)MarkR Wrote:
(08-26-2016, 08:00 AM)Stan the man Wrote:
(08-24-2016, 09:54 AM)nilbo Wrote: thank you Mark!

I spoke to CMS about this option last night.

They confirmed (although the person I spoke to struggled several times to explain it and had to get the help of a colleague, so lord knows if it's actually correct) that their calculation based on the Companies "profit" after all expenses.

So it doesn't sound like this route is any better than being a PAYEr.

Anyone experienced enough in here to define expenses and what can be done to reduce gross earnings?

Its the amount of net profit on your Self Assesment (the amount you have to pay tax on) what they use. Regardless of if you keep money in the business as "Retained Profit", for Child Support, that fact that profit exists means its considered.

Net profit / retained profit I get but what if you wanted to lump all of this into your pension (as you can have up to £40k per year). Can they stop you from doing this?

I'm thinking the only way to get around this problem is by going self employed as at least you have expenses you can claim for which reduce your "earnings".

A lot of the things you can claim for being Self Employed, you can if employed doing the same job. The only differance is with Employed, its other forms you fill out, and a bigger chance of being asked for reciepts etc.

Could you provide some examples as there are far more advantages of being self employed vs being on PAYE on a permanent basis?

I had a chat with an accountant re Child Maintenance. Their response is below:

With regards to child maintenance, naturally we can’t advise on the legal aspects of any arrangement that you’ve come to, more of a matter for a legal specialist however from an assessment/financial perspective we can certainly assist.  When assessing the amount due, it does help to a certain extent that you are through a limited company.  Initially the assessments are based on the salary and then dividends drawn from the company (i.e. your personal income).  It is possible that they can lift the corporate veil and assess on the profits of the company (if you’re the sole director/shareholder) however more often than not they tend to be happy to remain within the personal income on the grounds that you’re separate from the company which must maintain separate funds in order to finance growth and maintain payments for expenses.  This is something we’d be more than happy to work with you to assist.

 

(09-02-2016, 09:57 AM)Stan the man Wrote:
(08-31-2016, 10:28 AM)Stan the man Wrote:
(08-30-2016, 05:13 PM)MarkR Wrote:
(08-30-2016, 11:00 AM)Stan the man Wrote:
(08-26-2016, 08:21 PM)MarkR Wrote:
(08-26-2016, 08:00 AM)Stan the man Wrote:
(08-24-2016, 09:54 AM)nilbo Wrote: thank you Mark!

I spoke to CMS about this option last night.

They confirmed (although the person I spoke to struggled several times to explain it and had to get the help of a colleague, so lord knows if it's actually correct) that their calculation based on the Companies "profit" after all expenses.

So it doesn't sound like this route is any better than being a PAYEr.

Anyone experienced enough in here to define expenses and what can be done to reduce gross earnings?

Its the amount of net profit on your Self Assesment (the amount you have to pay tax on) what they use. Regardless of if you keep money in the business as "Retained Profit", for Child Support, that fact that profit exists means its considered.

Net profit / retained profit I get but what if you wanted to lump all of this into your pension (as you can have up to £40k per year). Can they stop you from doing this?

I'm thinking the only way to get around this problem is by going self employed as at least you have expenses you can claim for which reduce your "earnings".

A lot of the things you can claim for being Self Employed, you can if employed doing the same job. The only differance is with Employed, its other forms you fill out, and a bigger chance of being asked for reciepts etc.

Could you provide some examples as there are far more advantages of being self employed vs being on PAYE on a permanent basis?

I had a chat with an accountant re Child Maintenance. Their response is below:

With regards to child maintenance, naturally we can’t advise on the legal aspects of any arrangement that you’ve come to, more of a matter for a legal specialist however from an assessment/financial perspective we can certainly assist.  When assessing the amount due, it does help to a certain extent that you are through a limited company.  Initially the assessments are based on the salary and then dividends drawn from the company (i.e. your personal income).  It is possible that they can lift the corporate veil and assess on the profits of the company (if you’re the sole director/shareholder) however more often than not they tend to be happy to remain within the personal income on the grounds that you’re separate from the company which must maintain separate funds in order to finance growth and maintain payments for expenses.  This is something we’d be more than happy to work with you to assist.

 

I also got this response to (I've sought the advice from a few accountants):

In terms of Child Support Payments, if the money does not leave the company it is not technically your money, it is the companies money. However because you would be the only director it is a very close relationship you have with the company, it may be deemed, if investigated that any money held as profit in the company could be liable for the calculation on CSA  – each circumstance is treated on its own merits and your dedicated accountant would be able to advise on the best possible course of action.

For Child Support, the fact that money might remain in the business has no bearing on it.

It is profit achived.

It does work both ways, for example you might have made an overall loss in a tax year, but still paid yourself a wage as you had retained money in the business. In that situation, as you made a loss, no child support would be payable.
Posts made by me are my opinion and any factual information should be checked out. If you do not have a Solicitor, often your local CAB can get you some initial advice.
Reply


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