CSA, dodgy rental income etc

lacelady1

Hi there

New here, wondered if anyone could advise me.

I separated from my soon to be Ex husband 3 years ago, divorce going through, just at the nasty financial stage now...its been horrendous, I could write a book.

Basically ex was ok with payments up till he met his new GF, then he turned into a monster. We had a private agreement up to December last year, then out of the blue he just stopped paying without reason, refused to discuss it and generally acted like a c**ck ! Opened up a CSA case and then went through ok. He then changed jobs very unexpectedly to a job paying just over half what he was earning before. He didn't inform CSA though for about 3 months, in fact it was me that let them know he was no longer working for my brother who had previously employed him for 17 years.

CSA was readjusted but as he was earning less it meant I had to pay back over payments over a period of time. This happened again when he asked for another reassessment, and basically his payments have reduced from £90 pw to £47.


However, I have discovered he is subletting his property and is taking in rent of £440 per month. He has documented this in his Form E which came through from my Sol last week. He also has his father living with him, again he is charging him some sort of rent but I dont know how much.

His bank statements, the ones he bothered to put in, show cash payments into his account totalling nearly £20,000 which is extra to his weekly wages which average about £370 a week.

Can this rental income be taken into consideration as he has declared on his form E he is receiving it. I have sent everything off to the CSA asking for a review based on a change of circs and also that his lifestyle is completely inconsistent with declared income.

Any advice on the above would be most welcome. I have flagged up to CSA before about his rental income but they said they couldn't take it into account...I disagree. Technically he could be unemployed yet be raking it in from lodgers and not declaring it...how is he getting away with not declaring this rent ?

Kim

shell_542

You are allowed to sublet/rent a room and keep approx £350 a month income tax free (if the figure on the DirectGov website is correct) so that might have been what he CSA were referring to with regards to not being able to use it as income. Maybe you could contact them again and query whether the excess over £350 a month can be included?

With regards to the extra payments in his bank account, if you believe it is income from his job(s) being deposited separately, then you can apply for a variation on the grounds of diversion of income.

Soubrette

I don't think rental income counts as income that can be used by the CSA, same as pension income or (in the normal course of events) dividend income.

It isn't something that the CSA decide, it was decided by parliament.

You could write to your MP and complain about it but I don't think there is anything the CSA can do to help you on this one, their hands are tied by legislation.

If he has more than something like £16,000 in savings then you might get a proportion of the interest on that as part of his income.

Sorry to be so woolly - it's been a couple of years since I had to look into these things and of course things may have changed.

gratefulforhelp_2

It may be in your interests for you to ask for a reassessment, which I understand you can do and they have to act on.

There are websites telling NRPs how to evade the CSA, and hints and tips include sending in the payslips showing the lowest pay (maybe he was on sick pay?) and also job-hopping where the CSA have to track them down each time.

It may be that with a reassessment, payments go up again.

speedster

for tax and CS purposes, any rent recieved is classed as income.

however, if the rent only just covers the mortgage, then it is isn't taxable or classed as income.

incidentally, it's how the AA get away with paying no tax, they simply borrow shed loads so the interest on repayments is offset.

lacelady1

Hi there

Thanks for the advice.....the rent he is bringing in is on a property he rents from a landlord...I currently live in the FMH which is jointly mortgaged and guess who is paying all the mortgage, insurance, endowment policy attached to the mortgage and all the repairs...so far spent over 8k just putting right his crap DIY !

Trust me I am not being greedy but I know he is also cohabiting with his partner, bringing in the rental income that he has declared on his Form E but not to the tax man. I thought under the Rent a Room scheme anything over £70 had to be declared....I could be wrong.

Technically, he could be in a position of losing his job but still doing very nicely out of undeclared income from lodgers....how does the system allow this ? I thought there were rules against subletting.

Anyway, I have sent all the documents I have to the CSA....conveniently he hasnt sent all of them. didn't photocopy the back pages of the ones he didn't want me to see and most of his wage slips are missing. Initially he was declared on wages that were subject to emergency tax because he wouldn't send his p45 into his new employer, I assume for this very purpose.

If no luck, a phone call to the tax man might be in order to have a look at this unidentified 20k going into his account !

Could someone explain exactly what diversion of income is ?

Thanks

Kim

speedster

tricky one. if he is paying out rent to the landlord, then he wont be making much profit on subbing it out.

cant see a diversion of income sticking. it needs to be seen as "hiding" it or putting it out of reach etc.

dunno if tax man would investigate. with all the cuts going on, gov departments aren't exactly rushing to do anything.

lacelady1

speedster wrote: »

tricky one. if he is paying out rent to the landlord, then he wont be making much profit on subbing it out.

cant see a diversion of income sticking. it needs to be seen as "hiding" it or putting it out of reach etc.

dunno if tax man would investigate. with all the cuts going on, gov departments aren't exactly rushing to do anything.

Yes I take your point....but it must be difficult to prove he is hiding income.....that's the whole point of doing it I suppose, so it can't be found !

Understand with the Tax man too, although I owe then a hundred quid and they are practically beating my door down...also, If I were to move my BF in my house and not declare it with regard to my Tax Credits etc....I would probably find myself in court for fiddling benefits.

Its seems to me the law with regard to CSA is set up in favour of people fiddling it to their advantage.

shell_542

They should look into diversion of income if he is not declaring it all and (if income from a job) is getting it paid in a different way.

With regards to the Rent a room thing, the figure I quoted was what the DirectGov site quoted.

lacelady1

Thanks for the advice....the diversion of income thing might be worth looking into then....he may be getting some of his income diverted to his girlfriend as the company he now works for is something to do with her family....it would explain where all the extra cash has come from...being diverted to her then back through his account as he has listed it as a loan on his Form E..... I just think its his own money he is paying back into his account but it never when through his wage slips.

I will write again to the CSA tomorrow and ask them to look at this...they will have to do a lot of investigating mind you but the answer us probably lies in his GF's bank statements as a lot of the money has come from her bank account, but not all. About 9k is completely unaccounted for.

dazzadub

well he must have delcared it ias he certainly isnt hiding it, for a start we wouldnt know he had that much if it was hidden, and the poster wouldnt either.

he may have declared the money to csa and provided any paper work to get him out of it. he could have taken over power of atternoey for someone.

if he put the income from rent they csa would jump on that if they legally could.

they basically going on his work, and if he does low payed job they you dont get alot. simple.

because he has few quid in bank doesnt mean hes on fiddle. also contacting all the government dept about few quid he has could come back to bite you.

it could be deemed as harassment if he wanted to go that way, i did this to my ex wife, calling around saying i had this and this and was breaking this law etc when it was found i wasnt. harassment