help re self employed nrp

pd001

CSAworkerx wrote: »

A caseworker wont be able to tell what dividends have been paid, heres a tip for anyone reading, if ure nrp owns a company MENTION THE WORD DIVIDENDS ON THE PHONE.

We are taught to not mention them to either the nrp or pwc when speaking to directors,
Why is that?

and we only act on them if a pwc mentions she thinks he may have recived some, Thats advice you will never hear from a caseworker on the phone.
Again, why is that?

Next, If dividends are mentioned, ure case will go to what we call "variation officers" people specifically trained to deal with these circumstances amoung others, so my knowlage of how the process works in terms of how we track dividends is non-exsistent.
I can understand that i suppose

CSAworkerx

pd001 wrote: »

CSAworkerx wrote: »

A caseworker wont be able to tell what dividends have been paid, heres a tip for anyone reading, if ure nrp owns a company MENTION THE WORD DIVIDENDS ON THE PHONE.

We are taught to not mention them to either the nrp or pwc when speaking to directors,
Why is that?

and we only act on them if a pwc mentions she thinks he may have recived some, Thats advice you will never hear from a caseworker on the phone.
Again, why is that?

Next, If dividends are mentioned, ure case will go to what we call "variation officers" people specifically trained to deal with these circumstances amoung others, so my knowlage of how the process works in terms of how we track dividends is non-exsistent.
I can understand that i suppose

becuase dividends are frankly, a nightmare. I dont know much about them but to prove them can be a big challenge, The reason i think were not trained in them are simply they are rare, And variation officers are for this purpose.

we only act on them if the pwc informs us as we will have no prior knowlage to them unless the nrp informs us of them, so its sort of hear no evil see no evil, what we do not know we cannot assess on, only a pwc or a very honest nrp will give us divdend info, not any of our basic checks.

directors go to complex caseworkers, i work on the employed section, so when im speaking to an nrp and he mentions hes the director of a company, i flip the case to the complex team to progress, since a basic AO caseworker knows nothing of how we assess on directors, if dividends are mentioned, the case goes to both complex/variation officers.

Crellow4

Dividend income is really straightforward. Dividend income is only taken into account (on the 2003 scheme) by way of a Variation - NRP's are not required to report Dividends unless specifically asked. Once a Variation is sought, the Dividends paid in the previous 52 weeks are taken into account. They are not subject to NI and are taxed at a lower rate.

CSAworkerx

Crellow4 wrote: »

Dividend income is really straightforward. Dividend income is only taken into account (on the 2003 scheme) by way of a Variation - NRP's are not required to report Dividends unless specifically asked. Once a Variation is sought, the Dividends paid in the previous 52 weeks are taken into account. They are not subject to NI and are taxed at a lower rate.

Thats fine when you know all the information, its finding it that im told is a nightmare.

pd001

CSAworkerx wrote: »

pd001 wrote: »

becuase dividends are frankly, a nightmare. I dont know much about them but to prove them can be a big challenge, The reason i think were not trained in them are simply they are rare, And variation officers are for this purpose.

we only act on them if the pwc informs us as we will have no prior knowlage to them unless the nrp informs us of them, so its sort of hear no evil see no evil, what we do not know we cannot assess on, only a pwc or a very honest nrp will give us divdend info, not any of our basic checks.

directors go to complex caseworkers, i work on the employed section, so when im speaking to an nrp and he mentions hes the director of a company, i flip the case to the complex team to progress, since a basic AO caseworker knows nothing of how we assess on directors, if dividends are mentioned, the case goes to both complex/variation officers.

Thanks for that

Crellow4

Finding the information is not a nightmare - you ask the NRP to supply details. Generally there will be an accountant and they are legally required to supply the information if asked to do so. What is more difficult is if the NRP doesn't take a dividend but draws down a Directors loan account. What we are looking at here is diversion of income which can be tricky to prove.

pd001

Crellow4 wrote: »

Finding the information is not a nightmare - you ask the NRP to supply details. Generally there will be an accountant and they are legally required to supply the information if asked to do so. What is more difficult is if the NRP doesn't take a dividend but draws down a Directors loan account.
What we are looking at here is diversion of income which can be tricky to prove.
Very true, because having a directors loan account is not illegal, or even questionable.

HoneyNutLoop

Well yes and no. If the director has loaned the company money and is being repaid it, then as you say, no issue there.

But, say the company has taxable profits of £50k and the director decides instead of paying him/herself PAYE or dividends out of the profits they are going to set up a directors loan from the company to him/herself that might depending on the circumstances be grounds for a diversion of income variation.

Nothing wrong with it tax wise (so long as the repayment conditions are met) but tax law and child support law do not always sit comfortably together. According to some of the consultation documents, part of the reasonings for some of the changes to the latest scheme (csa3) are to address that issue.

Haddon201 - if it's a limited company, i.e registered on companies house, then he is not self-employed from a taxation point of view. He is an employee of the limited company and likely a director of it. While you can request copies of the companies accounts for a small fee from companies house, it is likely the company qualifies for the small companies exemption and so it can file abbreviated accounts. These do not show a lot of info and will not show you how much dividends the company paid.

Under CSA3, this problem is resolved, as you would apply for an unearned income variation and the details would be sourced directly from HMRC. Under CSA2 it's an "income not taken into account" variation and under CSA2 the onus is placed on the applicant to demonstrate that a variation award is appropriate, not the CSA or the non-applicant. The difficulties with that are quite obvious, hence the change for CSA3.

Ettenna

My ex is a director of his own company, has refused to submit accounts for the last 4 years nor VAT returns. The CSA put me back on a nil assessment because he wouldn't declare his income. However, he happened to mention to a caseworker in a conversation what he did as a job. Because he has told them, they can now assess him on average earnings for someone doing the same job. And this is enforceable.

Crellow4

If you are unhappy with a nil assessment Ettenna, you can appeal it and attend an independent tribunal. You don't just have to accept this.