Self Employed - 15% of net pay for 1 child ?

monicaj

Looking for advice for my nephew.

He and his partner split up last weekend and they have a 9 month old son. He has asked me for advice on what he should be paying. Without digging to deep into his affairs this is what I know.

He works on his father's farm as self employed
He is on a low wage, HOWEVER
He lives rent free in a new property on the farm classed as an agricultural dwelling
He has all his council tax, utility bills etc paid by the farm.

I don't think 15% of his low net income is going to be sufficient for him to put away, bearing in mind all these benefits in kind he is getting. Can anyone advise or should I just tell him to get in touch with his accountant asap to get a ball park figure.

She has told him she wants £50 per week, this would assume for CSA calculation of 15% that his net pay would be around £340 per week, there is no way he gets that in a wage but it's all these other benefits that he gets which makes it so confusing.

BTW they only recently (last month) moved into the farm property, prior to that they were living at her parents, so he would not have completed a Self Assessment based on his current circumstances.

Any advice appreciated.

DUTR

The PWC can't dictate what they want, it's 15% net for 1 child on csa2.

missmontana

It depends if they have a private agreement or decide to go thru the CSA.

15% is the figure the CSA use, so if he's only getting paid £100 pw, then they will assess him at £15 pw. Any assessments done by them will only start from the date they make contact and he will have to provide 3 months worth of payslips etc.

Its about his actual net income and I'm not sure they would take into consideration the fact he doesn't pay rent etc.

CSA will also take into account the number of nights he has the baby.

If anyone else has been in this situation then I am sure they will be along to help!!

speedster

not quite. they take £5 for the fisrst £100 a week, then 15% of anything over.

so, on £200 per week, £5 for first £100, then £15 for the second £200. = £20 per week.

obviously, a 1/7th reduction for every overnight stay in a week.

best thing he can do is get a projected profit and loss figure and give that to the csa.

in the meantime, start putting £20 or so a week away for any arrears which may be mounting up.

newyearnewme_2

I don't know what the rules are for self employed but maybe the question is what can he afford to pay i.e can he afford to pay more then 15% of his net wage (because he has no housing costs etc) but make sure if he makes any payments to the PWC that these are clearly marked child maintenance for child XXXXX. Or could he suggest to the pwc that he pays £x amount but buys certain items for the child i.e nappies, clothes or puts some money in a savings account for the child if he feels that 15% of his wage is to low and she agrees to this

monicaj

Thanks All

I know (well hope) he will provide the best for his son and I had previously advised him that as a minimum he should be putting away 15% of his net income, but it still bothers me that his low wage is due to having all these extra benefits and it could come back and bite him on the bum in the future ......

Jet

monicaj wrote: »

Thanks All

I know (well hope) he will provide the best for his son and I had previously advised him that as a minimum he should be putting away 15% of his net income, but it still bothers me that his low wage is due to having all these extra benefits and it could come back and bite him on the bum in the future ......

Unless they change the system, he will need to pay 15% (possibly less if he has overnights).

How much is rent/mortgage is or isn't is irrelevant to CSA 2.

chall1964

Hiya,

Follow the link -> https://secureonline.dwp.gov.uk/csa/v2/en/calculate-maintenance.asp and he will be able to roughly calculate what the assessment would be.

kelloggs36

Jet wrote: »

Unless they change the system, he will need to pay 15% (possibly less if he has overnights).

How much is rent/mortgage is or isn't is irrelevant to CSA 2.

Rent/mortgage is irrelevant on CS2