Company Directors & CSA

DX2

Mrs_Arcanum wrote: »

Would it be worth investigating adoption of your son by OH? Seems like the CSA will presume your son is being supported in some way by your ex so won't make any allowance for the fact your OH does.

You don't need to go down the adoption route, the CSA should be taking all the children within the household into account.

PreludeForTimeFeelers

thenewwife wrote: »

Having married a man with children from a previous mariage I find the CSA really quite harsh!! My husband has taken on my son lock stock and is happy to pay for the children he no longer lives with, however we have recently had a baby and the CSA take neither the fact he supports my son or the fact we have a new baby into account. Each time we try to better our lives we hit a brick wall with extra tax and extra CSA. No one seems to care that the ex wife was left all the money and car etc that they made a whilst together leaving my husband in debt, is now remarried, has god knows how many holidays a year, Tummy tucks, personnel trainners , new cars and a far better lifestyle than we will ever be able to achieve whilst paying for her to it. Perhaps if the CSA were fair to both parents there wouldn't be som many men trying to evaide payments. All this and the CSA fail to get my ex husband to pay a penny for the son he left behind. It is all wrong and I do feel for those who's ex's don't pay but I do see why so many people do their best not to pay. The CSA is unfair to the NRP.

The CSA will give your partner a 20% allowance for the two children who live in his household, and will assess the maintenance he has to pay based on the remaining 80% of his net income.

Goldie-K15

OK - I have pointed this out on a thread before. The CSA will only take into account EARNED income, this is in effect salary from limited companies.

Now the current tax regime, means that most (if not all - unless they have bad advice) directors of their own companies will take a very minimal salary of around the tax personal allowance. The rest of the profits made from the company will be drawn as dividends. This is a much more tax efficient way of getting income into your name as there is no national insurance on due on this.

Now there is no limit on what can be taken this way, obviously it is subject to tax and declaration on tax returns! Therefore others have suggested reporting to HMRC for using this method because people have expensive cars / houses - get a life!

The CSA DO NOT take into account dividend income! This is UNEARNED as it is derived from a shareholding (investment).

I personally am about to be made a director / shareholder rather than a normal employee, I stated this to the ex - that she would be entitled to £6 per week based on CSA calculations, so we have entered into a legal agreement so that she gets a figure based on what I pay now - linked to inflation. I see this as the only fair way - as the only person that would suffer would be my daughter! Shame that others do not feel the same??!!

clearingout

sadly, Goldie, others do not feel the same. I could name you a good number of regular users here dealing with just this issue. In fact, I am in regular dialogue with my MP about it and he in turn, talks to Maria Miller about it and reports back to me the uselessness of the situation. Children do suffer as a result of self-employed NRP's. Fact.

kelloggs36

they can take account of dividend income - under the old rules, it was part and parcel of the assessment and not broken down into earned or unearned, it was all clubbed together. under the new rules the PWC has to apply for a variation to get them taken into account.

Kimitatsu

Goldie-K15 wrote: »

OK - I have pointed this out on a thread before. The CSA will only take into account EARNED income, this is in effect salary from limited companies.

Now the current tax regime, means that most (if not all - unless they have bad advice) directors of their own companies will take a very minimal salary of around the tax personal allowance. The rest of the profits made from the company will be drawn as dividends. This is a much more tax efficient way of getting income into your name as there is no national insurance on due on this.

Now there is no limit on what can be taken this way, obviously it is subject to tax and declaration on tax returns! Therefore others have suggested reporting to HMRC for using this method because people have expensive cars / houses - get a life!

The CSA DO NOT take into account dividend income! This is UNEARNED as it is derived from a shareholding (investment).

I personally am about to be made a director / shareholder rather than a normal employee, I stated this to the ex - that she would be entitled to £6 per week based on CSA calculations, so we have entered into a legal agreement so that she gets a figure based on what I pay now - linked to inflation. I see this as the only fair way - as the only person that would suffer would be my daughter! Shame that others do not feel the same??!!

Unfortunately Goldie SOME NRP's use this tax efficiency as a way of getting out of paying for their children full stop, My ex does just this telling the CSA that he is either not working or that he draws no money from the company (but his partner does instead depsite the fact that he does all the work and she works full time elsewhere)

So for me I get £21 a month to raise my two beautiful boys because my ex uses it as a tool to get back at me. I realise he is a t**t but even so this is the case that many of us on here face.

Soubrette

Goldie-K15 wrote: »

OK - I have pointed this out on a thread before. The CSA will only take into account EARNED income, this is in effect salary from limited companies.

Now the current tax regime, means that most (if not all - unless they have bad advice) directors of their own companies will take a very minimal salary of around the tax personal allowance. The rest of the profits made from the company will be drawn as dividends. This is a much more tax efficient way of getting income into your name as there is no national insurance on due on this.

Now there is no limit on what can be taken this way, obviously it is subject to tax and declaration on tax returns! Therefore others have suggested reporting to HMRC for using this method because people have expensive cars / houses - get a life!

The CSA DO NOT take into account dividend income! This is UNEARNED as it is derived from a shareholding (investment).

I personally am about to be made a director / shareholder rather than a normal employee, I stated this to the ex - that she would be entitled to £6 per week based on CSA calculations, so we have entered into a legal agreement so that she gets a figure based on what I pay now - linked to inflation. I see this as the only fair way - as the only person that would suffer would be my daughter! Shame that others do not feel the same??!!

You are wrong, as a director/shareholder of a one man band limited company or as a controlling director, you would have control over the amount of money paid to you as salary/dividends and thus it counts as income. How do I know this? Put very simply, my ex thought he could keep all his money in his company until our girls were of age, in the meantime declaring that he earned 'minimum wage', a tribunal ruled that he had to pay based on what the company earned (less expenses etc) as he was in effect the company.

Fair play to you for making sure your daughter is all right - I wish all parents were like you, then we'd not need the CSA , my ex is also more reasonable now to be fair on him.

LJ1

I have a minute of agreement - things have been going well with the voluntary maintance for 2 years.....ex owns his own business as well as share in another business..new wife also dir of same business...I have just found out that he is going to go down the road of CSA....he will go down the road of making sure he is paying himself the min -
Is there anything I can do......do I just have to accept what the CSA calculate....the worst thing about my situation is ex is trying to get daughter to live with him 5 days - cos he can offer her a better lifestyle...what teenager given the choice would love to live a life where money was no problem.....she has said she does not want to be in the position where she has to choose.....Im trying to tread very carefully but I just cant compete financially with her dad......he seems to be able legaly to take away what was agreed in one hand - only to offer it with conditions on the other hand....as in your mum will have less but if you stay with me you wont have to worry about it......
Just wish i was in the position to say stick your money where the sun dont shine.....but I cant.....
Minute of agreement seems to be pretty worthless after 12 months - unless you have arrears.....he knows i wont be able to persue via lawyers due to costs involved....so do I just accept what CSA say and hope my daughter gets wise to what he is trying to do by flashing £ at her......