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Salary sacrifice
#11
Hi. you mentioned 16-22% being Guidelines for Pension Payment. What's the 16-22% of? a bit confused?

cheers
Reply
#12
(09-09-2016, 12:47 PM)Stan the man Wrote:
(09-09-2016, 07:37 AM)suggs108 Wrote: hmmm there's a thing I'll need to check with HR. I'm sure SAYE is the same as far as deductions go.
I've also got a departure in place on csa1 for travelling expenses so hopefully they can put that in place again .
I really can't think of anything else. ?
Cycle to work doesn't operate where I work and Health Check same so really I could be relying on my pension.
Hopefully that's enough to wipe the smile off her face n stop being greedy. My son is 16 , just left school in June so I've only got 2 yr left of this s@&t. Hopefully!
like I say I pay my way , but like yourself won't have the Mickey taken!

Yes you are correct. SAYE = NET. Sad

Be careful what you put on here as if you're seen to be squirreling money away from greedy broads, you get judged without knowing the background information as to why you have to do this in the first place!

Stan,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

Any background information does not change the answer.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.
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
#13
(09-10-2016, 04:25 PM)MarkR Wrote:
(09-09-2016, 12:47 PM)Stan the man Wrote:
(09-09-2016, 07:37 AM)suggs108 Wrote: hmmm there's a thing I'll need to check with HR. I'm sure SAYE is the same as far as deductions go.
I've also got a departure in place on csa1 for travelling expenses so hopefully they can put that in place again .
I really can't think of anything else. ?
Cycle to work doesn't operate where I work and Health Check same so really I could be relying on my pension.
Hopefully that's enough to wipe the smile off her face n stop being greedy. My son is 16 , just left school in June so I've only got 2 yr left of this s@&t. Hopefully!
like I say I pay my way , but like yourself won't have the Mickey taken!

Yes you are correct. SAYE = NET. Sad

Be careful what you put on here as if you're seen to be squirreling money away from greedy broads, you get judged without knowing the background information as to why you have to do this in the first place!

Stan,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

Any background information does not change the answer.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

Mark,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

"Net Profit" as you refer to is and, I'm assuming you mean Limited Company profit(?) is only disclosed in the official company records i.e. Financial returns et al. As an individual drawing a salary as a director/shareholder/employee of that company, you do not disclose anything regarding the company you work for and/or who pay your salary in your individual self assessment return. You literally only disclose the salary/income you have drawn from the company i.e. salary and dividends and any other income from other sources such as property rental, other investments etc.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

This is the problem - if you have disclosed that you only earn £12,000 then rightly so you should be investigated as the individual is royally trying to get round the system. However, if you disclose X amount and this is backed up by your accountant (i.e. last years tax earnings were £65k and are now they are 46K - thus a 25% dip in salary as your circumstances have changed) you are still paying a substantial amount of child maintenance, therefore it would be unnecessary for the CMS to investigate you as it is legitimate and clearly you are not trying to work the system.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

If you were not married, do not have anything to do with the other parent (as you have not seen them for over 10 years and do not have any form of communication with them, they don't know your circumstances etc) there would be no reason for them or the CMS to open a variation on you as they would have to prove that you're doing this (which I am not for the avoidance of doubt). In any event, surely you're entitled to contribute to a pension especially if you've done this throughout your working career. I don't see anything wrong with paying into a pension within the spirit of the rules i.e. 10-15% of your gross salary.


Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

I'm not sure if you're referring this to me or not. But I've never had financial separation with the other parent as we split before the child was even born and I've had absolutely no contact with her in over 10 years. When I was under the CSA I was paying a pension, and still am under the CMS (albeit a non-contributory one from my employer for the past 3 years). However, my circumstances have changed whereby my employment status has changed and I'm now having to pay this myself as my new employer is not paying it "non-contributory) so sadly, I have to make up the short fall.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

I fully appreciate the advice and guidance you provide Dad's in their respective circumstances and I also respect the fact you contribute a lot of your personal time to help people out and I take my hat off to you for this.

Please do not take what I'm about to say personally, but it would be helpful if you could show a bit of compassion to those that are being taken for a ride financially by other parents (as this does happen to a lot of fathers) and have to resort to restructuring their lives whether this be financially or via employment to just about to survive in the world and trying to do the right thing by paying maintenance. There are a lot of father's out there that have gotten away with paying nothing all of the child's life.
Reply
#14
(09-12-2016, 07:54 AM)Stan the man Wrote:
(09-10-2016, 04:25 PM)MarkR Wrote:
(09-09-2016, 12:47 PM)Stan the man Wrote:
(09-09-2016, 07:37 AM)suggs108 Wrote: hmmm there's a thing I'll need to check with HR. I'm sure SAYE is the same as far as deductions go.
I've also got a departure in place on csa1 for travelling expenses so hopefully they can put that in place again .
I really can't think of anything else. ?
Cycle to work doesn't operate where I work and Health Check same so really I could be relying on my pension.
Hopefully that's enough to wipe the smile off her face n stop being greedy. My son is 16 , just left school in June so I've only got 2 yr left of this s@&t. Hopefully!
like I say I pay my way , but like yourself won't have the Mickey taken!

Yes you are correct. SAYE = NET. Sad

Be careful what you put on here as if you're seen to be squirreling money away from greedy broads, you get judged without knowing the background information as to why you have to do this in the first place!

Stan,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

Any background information does not change the answer.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

Mark,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

"Net Profit" as you refer to is and, I'm assuming you mean Limited Company profit(?) is only disclosed in the official company records i.e. Financial returns et al. As an individual drawing a salary as a director/shareholder/employee of that company, you do not disclose anything regarding the company you work for and/or who pay your salary in your individual self assessment return. You literally only disclose the salary/income you have drawn from the company i.e. salary and dividends and any other income from other sources such as property rental, other investments etc.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

This is the problem - if you have disclosed that you only earn £12,000 then rightly so you should be investigated as the individual is royally trying to get round the system. However, if you disclose X amount and this is backed up by your accountant (i.e. last years tax earnings were £65k and are now they are 46K - thus a 25% dip in salary as your circumstances have changed) you are still paying a substantial amount of child maintenance, therefore it would be unnecessary for the CMS to investigate you as it is legitimate and clearly you are not trying to work the system.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

If you were not married, do not have anything to do with the other parent (as you have not seen them for over 10 years and do not have any form of communication with them, they don't know your circumstances etc) there would be no reason for them or the CMS to open a variation on you as they would have to prove that you're doing this (which I am not for the avoidance of doubt). In any event, surely you're entitled to contribute to a pension especially if you've done this throughout your working career. I don't see anything wrong with paying into a pension within the spirit of the rules i.e. 10-15% of your gross salary.


Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

I'm not sure if you're referring this to me or not. But I've never had financial separation with the other parent as we split before the child was even born and I've had absolutely no contact with her in over 10 years. When I was under the CSA I was paying a pension, and still am under the CMS (albeit a non-contributory one from my employer for the past 3 years). However, my circumstances have changed whereby my employment status has changed and I'm now having to pay this myself as my new employer is not paying it "non-contributory) so sadly, I have to make up the short fall.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

I fully appreciate the advice and guidance you provide Dad's in their respective circumstances and I also respect the fact you contribute a lot of your personal time to help people out and I take my hat off to you for this.

Please do not take what I'm about to say personally, but it would be helpful if you could show a bit of compassion to those that are being taken for a ride financially by other parents (as this does happen to a lot of fathers) and have to resort to restructuring their lives whether this be financially or via employment to just about to survive in the world and trying to do the right thing by paying maintenance. There are a lot of father's out there that have gotten away with paying nothing all of the child's life.

Anyone who has an income outside normal employment has to do a Self Assessment.  I have folded mine to hide the detail, but as you can see on the attachment, my calculation viewed on the HMRC Website, its "Profit from Self Employment". How you get to that amount does not come into this (maybe take it to an Accounting Forum), but for Child Support its the Total Income Received.

The Self Assessment is unique to your own business. Every transaction needs explaining. The software you use does your Self Assessment at the same time for you, in real time. I use Freeagent, Quick Books is another well known one, and to be fair, others do exist. The software handles the Self Assessment depending on how a company if formed (Sole Trader, Partnership, Limited Company). In the case of money paid to a director/owner/partner, the software needs to know if its
a, Expenses being paid
b, Salary
c, Drawings
d, Dividend etc paid out.

As long as the software is told the right information, then you will get a correct Self Assessment, reporting the correct amount on income to HMRC, what CMS will consider if involved.

On one of the many threads, the original question was how was Self Employment considered for Child Support.


CMS have no authority in their own right to investigate any Self Assessment, but they are duty bound to pass on any concerns to HMRC.
The example with £12,000 was just to demonstrate that its not the actual amount of cash received, its what the Self Assessment shows what counts.

The Financial Separation was not about your own case, I was making others aware that unless Pensions have been subject of any agreement/court action, that should you now be able to be in a better position than them, it could be challenged in court by a claim of the ex being at a disadvantage.


Attached Files Thumbnail(s)
   
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
#15
(09-12-2016, 04:31 PM)MarkR Wrote:
(09-12-2016, 07:54 AM)Stan the man Wrote:
(09-10-2016, 04:25 PM)MarkR Wrote:
(09-09-2016, 12:47 PM)Stan the man Wrote:
(09-09-2016, 07:37 AM)suggs108 Wrote: hmmm there's a thing I'll need to check with HR. I'm sure SAYE is the same as far as deductions go.
I've also got a departure in place on csa1 for travelling expenses so hopefully they can put that in place again .
I really can't think of anything else. ?
Cycle to work doesn't operate where I work and Health Check same so really I could be relying on my pension.
Hopefully that's enough to wipe the smile off her face n stop being greedy. My son is 16 , just left school in June so I've only got 2 yr left of this s@&t. Hopefully!
like I say I pay my way , but like yourself won't have the Mickey taken!

Yes you are correct. SAYE = NET. Sad

Be careful what you put on here as if you're seen to be squirreling money away from greedy broads, you get judged without knowing the background information as to why you have to do this in the first place!

Stan,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

Any background information does not change the answer.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

Mark,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

"Net Profit" as you refer to is and, I'm assuming you mean Limited Company profit(?) is only disclosed in the official company records i.e. Financial returns et al. As an individual drawing a salary as a director/shareholder/employee of that company, you do not disclose anything regarding the company you work for and/or who pay your salary in your individual self assessment return. You literally only disclose the salary/income you have drawn from the company i.e. salary and dividends and any other income from other sources such as property rental, other investments etc.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

This is the problem - if you have disclosed that you only earn £12,000 then rightly so you should be investigated as the individual is royally trying to get round the system. However, if you disclose X amount and this is backed up by your accountant (i.e. last years tax earnings were £65k and are now they are 46K - thus a 25% dip in salary as your circumstances have changed) you are still paying a substantial amount of child maintenance, therefore it would be unnecessary for the CMS to investigate you as it is legitimate and clearly you are not trying to work the system.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

If you were not married, do not have anything to do with the other parent (as you have not seen them for over 10 years and do not have any form of communication with them, they don't know your circumstances etc) there would be no reason for them or the CMS to open a variation on you as they would have to prove that you're doing this (which I am not for the avoidance of doubt). In any event, surely you're entitled to contribute to a pension especially if you've done this throughout your working career. I don't see anything wrong with paying into a pension within the spirit of the rules i.e. 10-15% of your gross salary.


Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

I'm not sure if you're referring this to me or not. But I've never had financial separation with the other parent as we split before the child was even born and I've had absolutely no contact with her in over 10 years. When I was under the CSA I was paying a pension, and still am under the CMS (albeit a non-contributory one from my employer for the past 3 years). However, my circumstances have changed whereby my employment status has changed and I'm now having to pay this myself as my new employer is not paying it "non-contributory) so sadly, I have to make up the short fall.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

I fully appreciate the advice and guidance you provide Dad's in their respective circumstances and I also respect the fact you contribute a lot of your personal time to help people out and I take my hat off to you for this.

Please do not take what I'm about to say personally, but it would be helpful if you could show a bit of compassion to those that are being taken for a ride financially by other parents (as this does happen to a lot of fathers) and have to resort to restructuring their lives whether this be financially or via employment to just about to survive in the world and trying to do the right thing by paying maintenance. There are a lot of father's out there that have gotten away with paying nothing all of the child's life.

Anyone who has an income outside normal employment has to do a Self Assessment.  I have folded mine to hide the detail, but as you can see on the attachment, my calculation viewed on the HMRC Website, its "Profit from Self Employment". How you get to that amount does not come into this (maybe take it to an Accounting Forum), but for Child Support its the Total Income Received.

The Self Assessment is unique to your own business. Every transaction needs explaining. The software you use does your Self Assessment at the same time for you, in real time. I use Freeagent, Quick Books is another well known one, and to be fair, others do exist. The software handles the Self Assessment depending on how a company if formed (Sole Trader, Partnership, Limited Company). In the case of money paid to a director/owner/partner, the software needs to know if its
a, Expenses being paid
b, Salary
c, Drawings
d, Dividend etc paid out.

As long as the software is told the right information, then you will get a correct Self Assessment, reporting the correct amount on income to HMRC, what CMS will consider if involved.

On one of the many threads, the original question was how was Self Employment considered for Child Support.


CMS have no authority in their own right to investigate any Self Assessment, but they are duty bound to pass on any concerns to HMRC.
The example with £12,000 was just to demonstrate that its not the actual amount of cash received, its what the Self Assessment shows what counts.

The Financial Separation was not about your own case, I was making others aware that unless Pensions have been subject of any agreement/court action, that should you now be able to be in a better position than them, it could be challenged in court by a claim of the ex being at a disadvantage.

Morning Mark,

Thank you as always for providing your input.

The below was taken directly from the CMS website:

The six steps
Step 1 – Income

Unless a paying parent gets certain benefits, we work out child maintenance using their taxable gross annual income as the
starting point. By ‘income’, we mean earnings from employment, self-employment (profits from a business), occupational or personal pensions and certain benefits. Gross annual income is the paying parent’s yearly income before Income Tax and National Insurance are taken off, but after occupational or personal pension scheme contributions are taken away.

What I can't work out is that if you are operating as a company (contractor but you're a director/shareholder), you may be required to leave some capital in the company bank account in order to cover unforeseeable expenses, i.e you need a buffer in the event that your contract terminates, you need to pay for equipment in order to perform your job, you still have to pay accounting fees when you're not working etc. So how can they still factor this into any CMS calculation as it discourages you to be able to grow your company and restricts the business financially ?

This completely contradicts the advice I was given by an advisor from the CMS who confirmed that you're regarded as an “employee” if you're a director / shareholder of your Limited Company and are drawing a salary from that company by way of a salary and dividends and  "company earnings" are separately disclosed in the company accounts and are not factored into the child maintenance calculations, as it’s purely related to the individual's GROSS personal earnings disclosed in their self assessment tax return.


Presumably where they mention "profits from a business" this is after ALL expenses, ALL pension contributions, ALL dividends paid to shareholders / employees (if there are more than one) and ALL salaries paid to employees of the company? If so, it's unlikely there will be much of a profit left but surely you're allowed a little buffer as companies still need to have a surplus in order to stay afloat?


Income outside normal employment has to do a Self Assessment - yes agreed, and if you're drawing a salary from the company I understand that you disclose this here, which includes other income from other investments etc.

Is self-employment the same as being an employee of a company in the sense of a Limited Company structure?
Reply
#16
(09-13-2016, 07:48 AM)Stan the man Wrote:
(09-12-2016, 04:31 PM)MarkR Wrote:
(09-12-2016, 07:54 AM)Stan the man Wrote:
(09-10-2016, 04:25 PM)MarkR Wrote:
(09-09-2016, 12:47 PM)Stan the man Wrote:
(09-09-2016, 07:37 AM)suggs108 Wrote: hmmm there's a thing I'll need to check with HR. I'm sure SAYE is the same as far as deductions go.
I've also got a departure in place on csa1 for travelling expenses so hopefully they can put that in place again .
I really can't think of anything else. ?
Cycle to work doesn't operate where I work and Health Check same so really I could be relying on my pension.
Hopefully that's enough to wipe the smile off her face n stop being greedy. My son is 16 , just left school in June so I've only got 2 yr left of this s@&t. Hopefully!
like I say I pay my way , but like yourself won't have the Mickey taken!

Yes you are correct. SAYE = NET. Sad

Be careful what you put on here as if you're seen to be squirreling money away from greedy broads, you get judged without knowing the background information as to why you have to do this in the first place!

Stan,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

Any background information does not change the answer.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

Mark,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

"Net Profit" as you refer to is and, I'm assuming you mean Limited Company profit(?) is only disclosed in the official company records i.e. Financial returns et al. As an individual drawing a salary as a director/shareholder/employee of that company, you do not disclose anything regarding the company you work for and/or who pay your salary in your individual self assessment return. You literally only disclose the salary/income you have drawn from the company i.e. salary and dividends and any other income from other sources such as property rental, other investments etc.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

This is the problem - if you have disclosed that you only earn £12,000 then rightly so you should be investigated as the individual is royally trying to get round the system. However, if you disclose X amount and this is backed up by your accountant (i.e. last years tax earnings were £65k and are now they are 46K - thus a 25% dip in salary as your circumstances have changed) you are still paying a substantial amount of child maintenance, therefore it would be unnecessary for the CMS to investigate you as it is legitimate and clearly you are not trying to work the system.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

If you were not married, do not have anything to do with the other parent (as you have not seen them for over 10 years and do not have any form of communication with them, they don't know your circumstances etc) there would be no reason for them or the CMS to open a variation on you as they would have to prove that you're doing this (which I am not for the avoidance of doubt). In any event, surely you're entitled to contribute to a pension especially if you've done this throughout your working career. I don't see anything wrong with paying into a pension within the spirit of the rules i.e. 10-15% of your gross salary.


Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

I'm not sure if you're referring this to me or not. But I've never had financial separation with the other parent as we split before the child was even born and I've had absolutely no contact with her in over 10 years. When I was under the CSA I was paying a pension, and still am under the CMS (albeit a non-contributory one from my employer for the past 3 years). However, my circumstances have changed whereby my employment status has changed and I'm now having to pay this myself as my new employer is not paying it "non-contributory) so sadly, I have to make up the short fall.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

I fully appreciate the advice and guidance you provide Dad's in their respective circumstances and I also respect the fact you contribute a lot of your personal time to help people out and I take my hat off to you for this.

Please do not take what I'm about to say personally, but it would be helpful if you could show a bit of compassion to those that are being taken for a ride financially by other parents (as this does happen to a lot of fathers) and have to resort to restructuring their lives whether this be financially or via employment to just about to survive in the world and trying to do the right thing by paying maintenance. There are a lot of father's out there that have gotten away with paying nothing all of the child's life.

Anyone who has an income outside normal employment has to do a Self Assessment.  I have folded mine to hide the detail, but as you can see on the attachment, my calculation viewed on the HMRC Website, its "Profit from Self Employment". How you get to that amount does not come into this (maybe take it to an Accounting Forum), but for Child Support its the Total Income Received.

The Self Assessment is unique to your own business. Every transaction needs explaining. The software you use does your Self Assessment at the same time for you, in real time. I use Freeagent, Quick Books is another well known one, and to be fair, others do exist. The software handles the Self Assessment depending on how a company if formed (Sole Trader, Partnership, Limited Company). In the case of money paid to a director/owner/partner, the software needs to know if its
a, Expenses being paid
b, Salary
c, Drawings
d, Dividend etc paid out.

As long as the software is told the right information, then you will get a correct Self Assessment, reporting the correct amount on income to HMRC, what CMS will consider if involved.

On one of the many threads, the original question was how was Self Employment considered for Child Support.


CMS have no authority in their own right to investigate any Self Assessment, but they are duty bound to pass on any concerns to HMRC.
The example with £12,000 was just to demonstrate that its not the actual amount of cash received, its what the Self Assessment shows what counts.

The Financial Separation was not about your own case, I was making others aware that unless Pensions have been subject of any agreement/court action, that should you now be able to be in a better position than them, it could be challenged in court by a claim of the ex being at a disadvantage.

Morning Mark,

Thank you as always for providing your input.

The below was taken directly from the CMS website:

The six steps
Step 1 – Income

Unless a paying parent gets certain benefits, we work out child maintenance using their taxable gross annual income as the
starting point. By ‘income’, we mean earnings from employment, self-employment (profits from a business), occupational or personal pensions and certain benefits. Gross annual income is the paying parent’s yearly income before Income Tax and National Insurance are taken off, but after occupational or personal pension scheme contributions are taken away.

What I can't work out is that if you are operating as a company (contractor but you're a director/shareholder), you may be required to leave some capital in the company bank account in order to cover unforeseeable expenses, i.e you need a buffer in the event that your contract terminates, you need to pay for equipment in order to perform your job, you still have to pay accounting fees when you're not working etc. So how can they still factor this into any CMS calculation as it discourages you to be able to grow your company and restricts the business financially ?

This completely contradicts the advice I was given by an advisor from the CMS who confirmed that you're regarded as an “employee” if you're a director / shareholder of your Limited Company and are drawing a salary from that company by way of a salary and dividends and  "company earnings" are separately disclosed in the company accounts and are not factored into the child maintenance calculations, as it’s purely related to the individual's GROSS personal earnings disclosed in their self assessment tax return.


Presumably where they mention "profits from a business" this is after ALL expenses, ALL pension contributions, ALL dividends paid to shareholders / employees (if there are more than one) and ALL salaries paid to employees of the company? If so, it's unlikely there will be much of a profit left but surely you're allowed a little buffer as companies still need to have a surplus in order to stay afloat?


Income outside normal employment has to do a Self Assessment - yes agreed, and if you're drawing a salary from the company I understand that you disclose this here, which includes other income from other investments etc.

Is self-employment the same as being an employee of a company in the sense of a Limited Company structure?

Outside of being a Sole Trader (as the profit belongs to one person only), the company needs to explain all cash flow.

The Self Employed person receiving the cash needs to explain this money, for example reimbursement of expenses/wages/drawings etc.

I have looked more into this today, and it would seam that outside of a sole trader, its only this income reported what would be considered for Child Support.

From an accounting point of view, the company retaining the cash would mean its subject to business taxes etc.

In terms of the owners of a business, building it up could cause issues, with higher tax brackets coming into it at time its took out.

As a Sole Trader, the way accounting software works, its going to put the business net profit (after all business related costs) on the Self Employed Profit line on a Self Assessment.

To put something else in this mix on this, if the Resident Parent knows of income being "hidden", for example by way of operating a Service Company, they can apply to CMS for a consideration of an income variance. CMS can ask a County Court to Order a company to disclose their accounts as part of this process.

To make matters even worse if anyone is considering this, money retained in a business adds to its market value, and if owned or part owned by an ex partner, is considered to be an asset. This means in the case of Spouse Maintenance or Financial Settlement, it could be considered, and if an order exists and it was not considered as part of the process, it could the order could be subject to an application to vary.
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
#17
(09-13-2016, 07:10 PM)MarkR Wrote:
(09-13-2016, 07:48 AM)Stan the man Wrote:
(09-12-2016, 04:31 PM)MarkR Wrote:
(09-12-2016, 07:54 AM)Stan the man Wrote:
(09-10-2016, 04:25 PM)MarkR Wrote:
(09-09-2016, 12:47 PM)Stan the man Wrote:
(09-09-2016, 07:37 AM)suggs108 Wrote: hmmm there's a thing I'll need to check with HR. I'm sure SAYE is the same as far as deductions go.
I've also got a departure in place on csa1 for travelling expenses so hopefully they can put that in place again .
I really can't think of anything else. ?
Cycle to work doesn't operate where I work and Health Check same so really I could be relying on my pension.
Hopefully that's enough to wipe the smile off her face n stop being greedy. My son is 16 , just left school in June so I've only got 2 yr left of this s@&t. Hopefully!
like I say I pay my way , but like yourself won't have the Mickey taken!

Yes you are correct. SAYE = NET. Sad

Be careful what you put on here as if you're seen to be squirreling money away from greedy broads, you get judged without knowing the background information as to why you have to do this in the first place!

Stan,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

Any background information does not change the answer.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

Mark,

A question related to how CMS deal with Self Employment was asked. It comes down to Net Profit on a Self Assessment.

"Net Profit" as you refer to is and, I'm assuming you mean Limited Company profit(?) is only disclosed in the official company records i.e. Financial returns et al. As an individual drawing a salary as a director/shareholder/employee of that company, you do not disclose anything regarding the company you work for and/or who pay your salary in your individual self assessment return. You literally only disclose the salary/income you have drawn from the company i.e. salary and dividends and any other income from other sources such as property rental, other investments etc.

I am aware of cases where a claim has been make that for example only 12,000 was paid and that some profit remained in the business. The fact profit existed means its considered, and if that capital is used in the following year, then that years net profit would be less.

This is the problem - if you have disclosed that you only earn £12,000 then rightly so you should be investigated as the individual is royally trying to get round the system. However, if you disclose X amount and this is backed up by your accountant (i.e. last years tax earnings were £65k and are now they are 46K - thus a 25% dip in salary as your circumstances have changed) you are still paying a substantial amount of child maintenance, therefore it would be unnecessary for the CMS to investigate you as it is legitimate and clearly you are not trying to work the system.

No question was asked about pension payments. I have looked more into this and a case for Spouse Maintenance could be brought by an ex wife (not a partner), if they can show that there career was stalled during a relationship, and they are now as a financial disadvantage as your able to secure your future, while they have limited work options due to having a child what lives with them.

If you were not married, do not have anything to do with the other parent (as you have not seen them for over 10 years and do not have any form of communication with them, they don't know your circumstances etc) there would be no reason for them or the CMS to open a variation on you as they would have to prove that you're doing this (which I am not for the avoidance of doubt). In any event, surely you're entitled to contribute to a pension especially if you've done this throughout your working career. I don't see anything wrong with paying into a pension within the spirit of the rules i.e. 10-15% of your gross salary.


Even after Financial Separation, this could be a "Significant" reason, to vary any order. (In law if pension payments start after an order was made, it could be allowed). If payments existed before Financial Separation, and increase above the disclosed amount could also be challenged.

I'm not sure if you're referring this to me or not. But I've never had financial separation with the other parent as we split before the child was even born and I've had absolutely no contact with her in over 10 years. When I was under the CSA I was paying a pension, and still am under the CMS (albeit a non-contributory one from my employer for the past 3 years). However, my circumstances have changed whereby my employment status has changed and I'm now having to pay this myself as my new employer is not paying it "non-contributory) so sadly, I have to make up the short fall.

You are not being Judged in any way, but this Forum Remit it to help Separated Dads, but its not about ways to reduce Child Support payments, by diverting income.  The only unfair aspect of Child Support is the no staying contact amount, when someone has not had a chance to defend themselves in a court.

I fully appreciate the advice and guidance you provide Dad's in their respective circumstances and I also respect the fact you contribute a lot of your personal time to help people out and I take my hat off to you for this.

Please do not take what I'm about to say personally, but it would be helpful if you could show a bit of compassion to those that are being taken for a ride financially by other parents (as this does happen to a lot of fathers) and have to resort to restructuring their lives whether this be financially or via employment to just about to survive in the world and trying to do the right thing by paying maintenance. There are a lot of father's out there that have gotten away with paying nothing all of the child's life.

Anyone who has an income outside normal employment has to do a Self Assessment.  I have folded mine to hide the detail, but as you can see on the attachment, my calculation viewed on the HMRC Website, its "Profit from Self Employment". How you get to that amount does not come into this (maybe take it to an Accounting Forum), but for Child Support its the Total Income Received.

The Self Assessment is unique to your own business. Every transaction needs explaining. The software you use does your Self Assessment at the same time for you, in real time. I use Freeagent, Quick Books is another well known one, and to be fair, others do exist. The software handles the Self Assessment depending on how a company if formed (Sole Trader, Partnership, Limited Company). In the case of money paid to a director/owner/partner, the software needs to know if its
a, Expenses being paid
b, Salary
c, Drawings
d, Dividend etc paid out.

As long as the software is told the right information, then you will get a correct Self Assessment, reporting the correct amount on income to HMRC, what CMS will consider if involved.

On one of the many threads, the original question was how was Self Employment considered for Child Support.


CMS have no authority in their own right to investigate any Self Assessment, but they are duty bound to pass on any concerns to HMRC.
The example with £12,000 was just to demonstrate that its not the actual amount of cash received, its what the Self Assessment shows what counts.

The Financial Separation was not about your own case, I was making others aware that unless Pensions have been subject of any agreement/court action, that should you now be able to be in a better position than them, it could be challenged in court by a claim of the ex being at a disadvantage.

Morning Mark,

Thank you as always for providing your input.

The below was taken directly from the CMS website:

The six steps
Step 1 – Income

Unless a paying parent gets certain benefits, we work out child maintenance using their taxable gross annual income as the
starting point. By ‘income’, we mean earnings from employment, self-employment (profits from a business), occupational or personal pensions and certain benefits. Gross annual income is the paying parent’s yearly income before Income Tax and National Insurance are taken off, but after occupational or personal pension scheme contributions are taken away.

What I can't work out is that if you are operating as a company (contractor but you're a director/shareholder), you may be required to leave some capital in the company bank account in order to cover unforeseeable expenses, i.e you need a buffer in the event that your contract terminates, you need to pay for equipment in order to perform your job, you still have to pay accounting fees when you're not working etc. So how can they still factor this into any CMS calculation as it discourages you to be able to grow your company and restricts the business financially ?

This completely contradicts the advice I was given by an advisor from the CMS who confirmed that you're regarded as an “employee” if you're a director / shareholder of your Limited Company and are drawing a salary from that company by way of a salary and dividends and  "company earnings" are separately disclosed in the company accounts and are not factored into the child maintenance calculations, as it’s purely related to the individual's GROSS personal earnings disclosed in their self assessment tax return.


Presumably where they mention "profits from a business" this is after ALL expenses, ALL pension contributions, ALL dividends paid to shareholders / employees (if there are more than one) and ALL salaries paid to employees of the company? If so, it's unlikely there will be much of a profit left but surely you're allowed a little buffer as companies still need to have a surplus in order to stay afloat?


Income outside normal employment has to do a Self Assessment - yes agreed, and if you're drawing a salary from the company I understand that you disclose this here, which includes other income from other investments etc.

Is self-employment the same as being an employee of a company in the sense of a Limited Company structure?

Outside of being a Sole Trader (as the profit belongs to one person only), the company needs to explain all cash flow.

The Self Employed person receiving the cash needs to explain this money, for example reimbursement of expenses/wages/drawings etc.

I have looked more into this today, and it would seam that outside of a sole trader, its only this income reported what would be considered for Child Support.

From an accounting point of view, the company retaining the cash would mean its subject to business taxes etc.

In terms of the owners of a business, building it up could cause issues, with higher tax brackets coming into it at time its took out.

As a Sole Trader, the way accounting software works, its going to put the business net profit (after all business related costs) on the Self Employed Profit line on a Self Assessment.

To put something else in this mix on this, if the Resident Parent knows of income being "hidden", for example by way of operating a Service Company, they can apply to CMS for a consideration of an income variance. CMS can ask a County Court to Order a company to disclose their accounts as part of this process.



To make matters even worse if anyone is considering this, money retained in a business adds to its market value, and if owned or part owned by an ex partner, is considered to be an asset. This means in the case of Spouse Maintenance or Financial Settlement, it could be considered, and if an order exists and it was not considered as part of the process, it could the order could be subject to an application to vary.

I have had threes responses from three different accountants who I have discussed this point with and have provided them below:

1)

Hi Stan
 
I think the confusion comes from the term ‘self-employed’.
 
You would have your own Limited company and would be an employee and Director – so technically self-employed, but not the ‘self-employed’ referred to on a personal tax return. If completing the ‘self-employment’ pages on a tax return you are likely to be a sole trader and not the owner of a Limited company.

2)

Self Assessment – this is a personal return that includes ALL your sources of income so your employment from the current role, new company employment (i.e. £8k salary) and any investment income (i.e. dividends).  It doesn’t include your company profit in full as this belongs to the company and disclosed on the company’s tax return;

3)

With regards to the CMS point, you’re not self employed.......you’re employed by the company for which it pays you a salary and you also receive dividend income. The disclosable figures to these guys are the salary and dividends that will be the £Xk we’d previously mentioned.  There will be a profit/surplus in the company but that’s the company funds and of no interest to the CMS so at end of each year when there’s cash left in the company, you’ll be able to choose what to do with it (e.g. dividends, pension, more expenses, retain as a warchest, etc).

Out of interest and for the purposes of my own circumstances, I have had absolutely NO contact with the Resident Parent for over ten years and I've never seen my child . This was a fling that I had with a woman who advised me some time after our relationship had ended that she was pregnant and I had advised that I did not want to become a father at the time as I felt I was too young and the relationship had ended, as I felt it would not be fair on the child given that the distance between ourselves was well over 200 miles. However, she decided on her own accord (against my wishes, may I add) to go-ahead and have the baby anyway! I also want to add that I have never missed one child support payment ever and I've been paying this now for nearly ten years and I'm only half way through!!

So, she has absolutely no idea where I live, what my employment status is, if I have got married or moved on - she knows literally nothing about me at all in the last ten years. So, my question is, how could she possibly know if income is being "hidden" ? My understanding from CMS and the information they have provided is that she would have to provide concrete evidence to prove that I am purposely reducing my salary to lower my maintenance payments before they could open an investigation for "variation" . So with my new limited company, she has absolutely no vested interest in this, she doesn't even know it exists and why would she (?) and my partner is also a small shareholder - so the Spouse Maintenance or Financial Settlement is completely wiped out in this instance, we weren't even married, it was a year fling at best where we saw each other once a month.
Reply
#18
(09-10-2016, 03:16 PM)suggs108 Wrote: Hi. you mentioned 16-22% being Guidelines for Pension Payment. What's the 16-22% of? a bit confused?

cheers

Just an update : ive contacted both CMA and the Options team twice at different times.

Categorically : There is no cap of 16-22% on pension contributions

(09-09-2016, 06:29 AM)Stan the man Wrote:
(09-09-2016, 05:48 AM)suggs108 Wrote: Hi. Been reading this thread with interest . can I confirm a few things please.
I'm employed . If I make the largest pension payment available on a new pension ran by my employer, 100% of the payment ( unlike the old csa 1)will be taking into account and reduce my maintenance payment .
I already have 3 deductions on my wage slip each month for Save As You Earn Share Scheme so I take it if I plough more into this, the maintenance payment drops also?
Make me furious that she is sitting there taking everything I earn in . ps. I pay my child support A1 also but some of these payments the CMA are gonna come up with I'm sure are gonna be crippling to me if I don't act now. I'm on CSA 1 now . Migrating to CSA 2 in March 17

thanks for your help

It's my understanding that the Save As You Earn employment schemes take your salary out of your NET pay not gross, therefore you would be caught still by the CMS. I do a BAYE which take mine out of gross. You are correct though with regards to the pension contributions, these do come out of your gross pay, thus reducing your liability to the CMS. Whether I recommend doing 100% of your wages I'm not sure as they can investigate excessive contributions. I believe someone mentioned on here the other day that the CMS have their own internal guidelines of around 16-22% being deemed acceptable.

Hi Update: Categorically CMS do NOT have any cap on Pension Payments. Asked 4 separate staff today including a Maintenance  Calc Staff member
Reply
#19
(09-14-2016, 03:19 PM)suggs108 Wrote:
(09-10-2016, 03:16 PM)suggs108 Wrote: Hi. you mentioned 16-22% being Guidelines for Pension Payment. What's the 16-22% of? a bit confused?

cheers

Just an update : ive contacted both CMA and the Options team twice at different times.

Categorically : There is no cap of 16-22% on pension contributions

(09-09-2016, 06:29 AM)Stan the man Wrote:
(09-09-2016, 05:48 AM)suggs108 Wrote: Hi. Been reading this thread with interest . can I confirm a few things please.
I'm employed . If I make the largest pension payment available on a new pension ran by my employer, 100% of the payment ( unlike the old csa 1)will be taking into account and reduce my maintenance payment .
I already have 3 deductions on my wage slip each month for Save As You Earn Share Scheme so I take it if I plough more into this, the maintenance payment drops also?
Make me furious that she is sitting there taking everything I earn in . ps. I pay my child support A1 also but some of these payments the CMA are gonna come up with I'm sure are gonna be crippling to me if I don't act now. I'm on CSA 1 now . Migrating to CSA 2 in March 17

thanks for your help

It's my understanding that the Save As You Earn employment schemes take your salary out of your NET pay not gross, therefore you would be caught still by the CMS. I do a BAYE which take mine out of gross. You are correct though with regards to the pension contributions, these do come out of your gross pay, thus reducing your liability to the CMS. Whether I recommend doing 100% of your wages I'm not sure as they can investigate excessive contributions. I believe someone mentioned on here the other day that the CMS have their own internal guidelines of around 16-22% being deemed acceptable.

Hi Update: Categorically CMS do NOT have any cap on Pension Payments. Asked 4 separate staff today including a Maintenance  Calc Staff member

The thing is you just can't trust anything they say. I've spoken to a number of different "advisors" and have been given conflicting information time and time again. The process is flawed-  they are unable to interpret their own policies and just make it up as they go along. You could get the advice of one and think you're working within the guidelines and then they catch you out later on down the line and you can say you spoke to X who advised me of this on such date and such time, ultimately this will hold no weight. They say the calls are "recorded" but when instances appear where the advice they have given you is incorrect and you have followed it and by virtue criticise their purpose, all of a sudden they won't have a record of the conversation - it is so corrupt and a total failure and we all are held accountable by them.

The only thing you really need to know is that they get their figures from HMRC - that is the long and short of it. Whatever you earn personally on a taxable gross basis is captured via your self assessment form or via PAYE and they work out their figures based on this.
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