CSA - validation of income of individaul working as a ltd company

simmoshouse

Can anyone advise me how the CSA should confirm the income of someone who operates as a limited company? From experience they appear to rely on the word of the individual and, at best, Co’s House, although if the company turnover is under circa £3million (which it would be for most “sole traders” operating as a limited company) the accounts do not have to show the directors pay or company turnover for that matter. So they cant confirm anything from these other than profit!

Should they not confirm the income by sight of the full accounts? Also, as this is historic shouldn’t they seek sight of interim accounts or copies of the limited co bank statements to get the up to date earnings?

If they wont do this can the ex partner get sight of the accounts by requesting them through a solicitor? Alternatively can they get hold of the bank statements in this way?

Im asking on behalf of my sister, who’s ex is stating to the CSA that he earns £100 per week and hence pays her the minimum. Shared friends and his own kids have stated that he knows he is stitching her up and actually earns £40k+.

Has anyone else had the same experience and have any suggestions.

Any help appreciated.

Thanks

CSA_Help

simmoshouse wrote: »

Can anyone advise me how the CSA should confirm the income of someone who operates as a limited company? From experience they appear to rely on the word of the individual and, at best, Co’s House, although if the company turnover is under circa £3million (which it would be for most “sole traders” operating as a limited company) the accounts do not have to show the directors pay or company turnover for that matter. So they cant confirm anything from these other than profit!

Should they not confirm the income by sight of the full accounts? Also, as this is historic shouldn’t they seek sight of interim accounts or copies of the limited co bank statements to get the up to date earnings?

If they wont do this can the ex partner get sight of the accounts by requesting them through a solicitor? Alternatively can they get hold of the bank statements in this way?

Im asking on behalf of my sister, who’s ex is stating to the CSA that he earns £100 per week and hence pays her the minimum. Shared friends and his own kids have stated that he knows he is stitching her up and actually earns £40k+.

Has anyone else had the same experience and have any suggestions.

Any help appreciated.

Thanks

If he is earning £100 pw he is below the minimum wage (depends on how many hours he does)

If he is the sole director and/OR majority shareholder they will use dividend income for the previous year .

The company accounts are available online from Companies House you pay £1 per document that you download for the Company .

If the dividends are diverted to someone else CSA can sort that out as well .:)

Hope this helps

speedster

CSA_Help wrote: »

If he is earning £100 pw he is below the minimum wage (depends on how many hours he does)

If he is the sole director and/OR majority shareholder they will use dividend income for the previous year .

The company accounts are available online from Companies House you pay £1 per document that you download for the Company .

If the dividends are diverted to someone else CSA can sort that out as well .:)

Hope this helps

not necessarily csa help.

minimum wage rules do not apply for small businesses.

dividends aren't used in assessments unless under variation.

also, company accounts will only show profit or loss. not dividends.

and......... the csa cant find their arzes with both hands, let alone dividend payments, legitimate expenses to other shareholders etc. :T

lastly, unless the pwc is willing to jump through hoops supplying them with info, they wont bother. there are far more easy (paye 40% deo) targets to bully.

Sidekick_2

simmoshouse wrote: »

Can anyone advise me how the CSA should confirm the income of someone who operates as a limited company? From experience they appear to rely on the word of the individual and, at best, Co’s House, although if the company turnover is under circa £3million (which it would be for most “sole traders” operating as a limited company) the accounts do not have to show the directors pay or company turnover for that matter. So they cant confirm anything from these other than profit!

The directors income is what the assessment should be based on. Did they take into account any dividends paid to him ?

Should they not confirm the income by sight of the full accounts? Also, as this is historic shouldn’t they seek sight of interim accounts or copies of the limited co bank statements to get the up to date earnings?

No, because the company is not due to pay CM the director is.

If they wont do this can the ex partner get sight of the accounts by requesting them through a solicitor? Alternatively can they get hold of the bank statements in this way?

No, if it a private company

Im asking on behalf of my sister, who’s ex is stating to the CSA that he earns £100 per week and hence pays her the minimum. Shared friends and his own kids have stated that he knows he is stitching her up and actually earns £40k+.

She would need to ask for a variation as lifestyle inconsistent with earnings.If she appeals and it goes to a tribunal, they could ask to see accounts.

Hope this helps.

Sidekick_2

speedster wrote: »

not necessarily csa help.

minimum wage rules do not apply for small businesses.

dividends aren't used in assessments unless under variation.

also, company accounts will only show profit or loss. not dividends.

and......... the csa cant find their arzes with both hands, let alone dividend payments, legitimate expenses to other shareholders etc. :T

lastly, unless the pwc is willing to jump through hoops supplying them with info, they wont bother. there are far more easy (paye 40% deo) targets to bully.

This is all correct :T

There is a reason why minimum wage does not apply to self employed and directors, if tax was due to Inland Rev. the business couldn't state it has got to pay minimum wage first.;)

CSA_Help

Sidekick wrote: »

This is all correct :T

There is a reason why minimum wage does not apply to self employed and directors, if tax was due to Inland Rev. the business couldn't state it has got to pay minimum wage first.;)

Ok i stand corrected then
My £100 pw went to £175 once the minimum wage kicked in .They took dividends into account as shown on companies accounts even though they weren't mine as i was an employee (going through appeal just now) .

I previously went throgh an IR35 review as well .

Mmmmmm wonder if the PWC instigated that as well

Sidekick_2

CSA_Help wrote: »

Ok i stand corrected then
My £100 pw went to £175 once the minimum wage kicked in .They took dividends into account as shown on companies accounts even though they weren't mine as i was an employee (going through appeal just now) .

They can take someone else's dividends into account if they feel you have diverted some of your income to that person. How far has the appeal got ?

I previously went throgh an IR35 review as well .

Mmmmmm wonder if the PWC instigated that as well

I'm still waiting for mine
PS did you claim on your company liability insurance;)

CSA_Help

Sidekick wrote: »

They can take someone else's dividends into account if they feel you have diverted some of your income to that person. How far has the appeal got ?





I'm still waiting for mine
PS did you claim on your company liability insurance;)

1/2 of my dividends got wiped as they spread it over 2 years but the other 1/2 is going to appeal as these weren't in my name .My accountant is confiming this for the appeal people .



Went through IR 35 myself and accountant's husband as he was a contractor and was heavily involved with shout99 and had went through IR35 with other people on their books and won the 3 cases .

simmoshouse

Thanks for the advice to date. I agree that the CSA couldnt find change in their own pockets!!! they seem to place all the onus on the individual to gain the information, and when the other party isnt playing ball there is not much chance of success, other than maybe hiring a private investigator!!!

I am not familiar with IR35, I assume this relates to the individual working as a ltd company and is Inland Rev related, but could someone please expand. is it something my sister can instigate.

Also, does anyone know why the CSA cant or wont go direct to the IR to gain information on the salary paid??

Thanks for any help

Soubrette

Why won't the CSA bother going to the IR? Why would they when as speedster says, they have other more lucrative NRPs to chase.

Your sister should apply for a variation based on lifestyle inconsistent with income - she will need to gather proof of this, does she have copies of recent bank accounts etc, what house does he live in, what car does he drive, what holidays does he take etc. Do a statement of affairs with as many of his outgoings as you can reasonably estimate, for example, if she knows his address then you should be able to find out his council tax.

I've never heard of anyone actually getting the CSA to agree with an appeal though. However, when she is declined, then you get the chance to ask for a Tribunal.

The Tribunal may ask for all sorts of evidence and any evidence asked for will be shown to you.

I am in the middle of a Tribunal and the NRP has had to provide full company accounts (the company is not large enough to give full accounts to company house) and full details of his income and expenditure from all bank accounts, credit cards etc. Although I personally don't agree with this part, all evidence presented is copied to both the PWC and the NRP.

The downsides to be considered is that awards can be decreased and it's taken a long time - over a year for me and I still haven't actually got a date for the Tribunal. The relationship between PWC and NRP is almost certainly going to suffer, your sister needs to ask herself if this is worth going through.

The plus sides as the PWC - you don't have to provide anything and of course child maintenance may increase.

Any change in maintenance should be backdated to the time it was first in dispute.

IR35 - when any contracts with a company are deemed to 'hide' the fact the person is really employed by the company he is contracting with. Unlike employed/self employed spats, a contractor deemed to fall under IR35 will still be liable for any costs being an employee such as NI payments, the company the HMRC deem is the employer pays nothing.

It's a weird thing where you are either a Director, employee or self employed depending on how the Government can make the most money out of you.

The only way to use this would be if your sister was aware that certain contracts come under IR35 and ask HMRC to investigate. All income from those contracts will be deemed employed income and taxed accordingly, it therefore becomes inefficient to take them as dividends. The NRPs income should therefore rise. However the HMRC are under no obligation to make public the results of their investigation or indeed if they do ever investigate. One point our accountant used to make, if he is taken less than minimum wage and it is on a NI threshold, then HMRC are more likely to be interested in his company if someone does report him for possible tax evasion.

Good luck

Sou

Sidekick_2

Hi

the NRP has had to provide full company accounts (the company is not large enough to give full accounts to company house) and full details of his income and expenditure from all bank accounts, credit cards etc.

They can only ask for this imformation, the NRP can refuse to give Company accounts.They can only ask for the NRP's income.