child maintenance

babblebrook

Can you help me please?. Have been searching for this answer... i'm separated and am trying to find out about correct levels of child maintenance. I have 2 children and know the contribution should be 20% of net monthly income... BUT i know my ex husband pays to a company pension, pays tax on his company car, fuel and phone ect too, so should the amount paid for the children be 20% be before these deductions are taken off ?

loftus

The 20% is of his net income after income tax, national insurance and pension contributions.

myrnahaz

The added benefits in kind (car, phone, fuel etc) are good news for you because they are, effectively, additional salary - HMR&C will add the value of his benefits (less allowances) to his basic pay and come up with an amount that is much more than the value of his salary alone (eg, if he has £20,000 gross pay and a £20,000 car, he's deemed to earn over £30,000), so even if you take the tax, insurance etc off that figure, the amount of maintenance he pays will be higher than if he had no car etc.

Eg - very simply - and assuming he pays basic rate tax; if he earns £20,000 he'll pay around 33% tax, ins etc, so his net pay is £13,400 and your 20% will be around £2,500. (assume 22% tax plus 11% NI)
If his benefits in kind add another £15,000 to his basic wage, (£35k less 33% = £23,450) then your 20% will be around £4,500.
Please take this as a lay-person's advice because I'm not an accountant and I don't know how child maintenance works so I may have got it completely wrong, but I don't think I'm far off the mark.

Edit - had to correct my maths!!