Nil assessment - NRP has put everything in new partner's name!

Matt_Fry

http://forums.moneysavingexpert.com/showpost.php?p=41721820&postcount=101 see Making Child Support Fairer.

Marisco

Maybe they could just go after the NRP's "wage" rather than profits and dividends? I'll be the first to admit I know nothing about self employed employment, but from what I've read, it seems that PWC's want a slice of the profits and dividends. It's no wonder they go "off radar". If the business is successful, then why not go on average earnings, that way the NRP's cannot use the "putting more in pensions" etc ruse, and the PWC cannot grab profits and divvies. If the business is new, then leave them alone till they are up and running. That way the NRP knows that even if they try to hide assets, they will still get assessed on average earnings, and they won't get hammered when they are first setting up. The way it is at the min, it's not fair to either party, but it is the CSA!!!!!!!:(

clearingout

unfortunately, marisco, it's not that simple. The HMRC will accept a director, for example, earning on minimum wage and taking the rest of his salary in dividends. As such, a director earns £8k a year and takes a further, say, £50k from his/her business as dividends - there is nothing illegal or wrong with this. But the CSA can only assess the £8k for child maintenance purposes so if the NRP doesn't want to pay anymore, he/she doesn't have to. The PWC either accepts that or is forced into 'lifestyle inconsistent with income' and all the acrimony that goes with it. He/she can also pay his new partner a wage (which is why my ex has done - to the tune of approx £25k a year) and again, that's money which is untouchable for CSA purposes. I am not suggesting that new partners can't be employed in a legitimate way, but in many cases (and in my ex's case), they are employed whilst having full time employment elsewhere. Quite simply, my ex's household has another £25k a year going into it, on top of a full-time salary and the minimum salary plus £50k in dividends my ex takes. Our children get nothing. There is no way you can tell me that's 'fair'.

bongo33

clearingout wrote: »

As such, a director earns £8k a year and takes a further, say, £50k from his/her business as dividends - there is nothing illegal or wrong with this. But the CSA can only assess the £8k for child maintenance purposes.

Even if the NRP declared those dividends?

clearingout

I might be wrong but I think it's a case of the PWC having to ask to have the dividends taken into account. If they're declared and used for maintenance purposes, I have no issue with self employment. Sadly, if you look at these boards, it would appear that often they are not. And that's where the fun starts!

Marisco

Thanks for the clarification clearingout. That's why I said use the yardstick of average wage. I'm not sure what the average wage is, but say it's 25k, so if your ex only "declares" 8k in wages, then take 17k from the dividends, instead of the whole 50k, if you see what I mean. If he wants to pay his current partner 25k, then he'll know it makes no difference, he'll still get assessed on 25k (or whatever the average is) I think that would be fairer, he would still pay, but he'll still get to keep "profits" and might not feel he's getting "ripped off".

A different system would have to be used for new businesses, but the NRP would know that when/if he makes a success of his business, the whole lot won't be assessed. It might stop them trying to hide assets, if they know the whole lot is not going to be assessed. TBH, I would be very resentful if I thought everything was going to be assessed, but if I knew there was a "ceiling" on it, I wouldn't mind. Mind, if the NRP is a deadbeat, then nothing is going to work, but at least it would make compliant NRP's feel all their hard work is not in vain.

Kimitatsu

Many NRP's though Marisco use a self employed situation to avoid paying any maintenance at all.

Take my situation, the NRP runs the company (proven by his own CV posted online!!) and pays himself and his partner minimum wage of £5k per year. No problem so far.....as that is perfectly legal, for the self employed they do not get taxed on didividends so thats a loophole that they can exploit.

His partner works full time as a teacher on £30k+ a year, he works for 3 other companies as a self employed contractor, and here is the best bit, 50 out of 51 shares in the company are in his partners name. Therefore under the law she claims all of the dividends for him and he is left with an "assessable" income of £5k on a 40 hour week. So they have in excess of £75K going into their household and the assessment is £5 a week for two children.

For me I have a long drawn out argument to prove that he does the work and so the assessment should be changed but whenever the CSA get to criminal compliance he can miraculously manage to produce some sort of accounts - not full ones naturally but enough to satisfy the CSA. They have told me that they know he is pulling a fast one but until we get to a tribunal then nothing will happen.

That is the loophole which should be closed because its not about it being a new company or trying to bleed him dry, its about him making a fair contribution to his children. Unfortunately there are many PWC's on this board who can relate to this scenario.

Marisco

I see what you're saying Kimi, would he be the same if he knew the whole lot was not going to be assessed? If it was restricted to average wage? I know some are total !!!!!! (my daughter was married to one:mad:) and will do anything to get out of paying, so I suppose if someone is that determined, there is not much that can be done:( But it might work for the "borderline" cases, i.e those that don't mind paying something, but don't want to be fleeced on everything.

Kimitatsu

In my case marisco it wouldnt matter because he has it in his head that he wont give me a penny - he is so blinkered that he cannot see its for his children! Thankfully I have a wonderful husband and "dad" to my children who loves all of us and as far as the boys and he are concerned we are all one.

Currently the CSA rules are there so they only assess on profit so they do give the self employed a huge amount of lattitude allowing a large amount to be claimed against tax. Dividends are paid out of the profits so again its not about fleecing the NRP necessarily because with a good accountant there is a lot of lattitude, and I for one and many PWC's would be happy to abide by that. On another thread someone was suggesting that CM should be capped at £100 a week - ha! To even get a sniff at that would be great!

Unfortunately its just yet another case of the inadequacy of the current CSA system, for me I would be happy at a flat rate system at an average wage stepped according to profits but the CSA seems incapable of assessing even that.

colacubes

You know what I find shocking. The cases which progressed without hitch as in mine were ones where the parent with care was originally on benefits when cs1 had a crack down on non resident parents not paying when the benefit system was taking the strain. I remember a unaranged knock at the door which I did not mind, it was social services and dwp and they did two fold, helped me claim the right benefits as was sick and someone had reported me for needing help, which was a great help it turned out as I had not idea what help I could get, and then asking me for any details I had re my ex as in old pay slips etc...as said it was my duty to provide them so they could claw the money back.

So they helped me and I did what I thought I had to do, no problems with it really and in turn my csa1 case went from no payment due to him trying to argue the kids were not his (hahaha rubbish) and in the end he paid up.

My point is I feel I have been looked after even now fine by the csa, but get distressed when I read how hard a time others have had. I just wonder if these nrp had tried what they did back then if rp was on benefits wether they rp would have got more help.

I feel it was the dwp back then who made the csa act.

I really hope you get your money