Am i being greedy

misslady

Hi

I need some advice and I am not sure where I stand. I currently receive £500 a month maintenance for my two children. This is a private agreement. My ex works as a contractor and earns app £800 per day. He however, has a company set up and the way it is structured he only draws minimum monthly salary and then takes dividends twice a year. I have always been content with what I have received from him, but I have had it pointed out on numerous occassions that he should be paying much more than he does.

I am concerned about taking it further as I am not sure what income they will use. If they use his salaried income I will obviously receive less.

How does it work in terms of having your own company etc.

DUTR

The monies would be for child support not maintenance, and from reading many of the posts as self employed you may well get little or nothing worth writing on here about.
Then when you do get an assesment, you may have to appeal which takes time again, in between, he may choose not to contribute until the matter is resolved.
Why rock the boat? Only you can decide if what you are recieving is ample.

HoneyNutLoop

This reply is based on CSA3 which is what will be used to calculate child maintenance for all new applications from 25th of this month.

If you applied, you would have to specifically tell the Child Maintenance Service about his dividend income as it can only be considered under a variation for unearned income. Initially, CMS would only get details of your ex's PAYE income for the previous full tax year to base the maintenance calculation upon. They have to separately request details of any unearned income from HMRC, again for the previous full tax year, and can only do it once they are in receipt of a variation application. You can complete it over the phone at the same time you apply for maintenance.

For two children, he should pay 16% of his gross taxable income less any pension contributions. To pay child maintenance of £500 a month he would need to earn £37,500 from both PAYE and dividends and after deducting his pension contributions in the last full tax year, so 2012/13.

I attach a booklet that explains how things work.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/85746/how-we-work-out-child-maintenance.pdf

There are other things to consider besides money though. Involving the CMS (CSA for prior schemes) will likely impact on your relationship with your ex. If things are currently civil, perhaps even flexible and amicable, if he contributes extra at times or buys things for the kids or helps out with school trips, etc, you could find this all changes/ends if you involve the government in your arrangement. You'll see from some of the threads on here that some NRP's feel that once they've paid their maintenance their job as a parent is done and feel under no obligation to do anything more. If you have an ex that isn't currently like that, the question you also need to ask yourself is how much is that worth to your kids? How much extra money would you be willing to risk that relationship for?

If you think a change in the child maintenance amount is appropriate, maybe have a look at the child maintenance options website or give them a ring to see how you and your ex could discuss changing things a little between you. Don't forget that from around April next year CMS plans to start charging for its services, both an application charge of £25 I think plus if they are collecting the payments you will be charged 4% and your ex 20% of the payments due.

misslady

Thanks for your replies. I think I have always been content as he is a good person and he treats his children well. However, I am a single mum working full time and struggling to make ends meet each month and he is paying literally what is equivalent to less than a days earnings.

Takeaway_Addict

misslady wrote: »

Thanks for your replies. I think I have always been content as he is a good person and he treats his children well. However, I am a single mum working full time and struggling to make ends meet each month and he is paying literally what is equivalent to less than a days earnings.

Does he look after them at any time?

Also, have you spoke to him about this, it sounds like you get on reasonably well and he may well increase what he pays amicably, but only you can make that choice

justontime

HoneyNutLoop has given you some very good advice. I think you need to stop thinking about what he charges per day as what he earns. His company has overheads which all have to come out of that money before he can pay himself anything. Liability insurance is very expensive and is a requirement for most self employed contractors. Then you have VAT, Corporation Tax, travel costs, possibly a company vehicle, possibly overnight accommodation costs depending on his work, accountancy costs, phone, website, computers, other business equipment, possibly he pays an agency to find work for him, advertising, legal costs, stationary, office expenses (even if he only has a home office), staff costs if he has any (eg he may have someone to do his admin), payroll costs even if it is only him, employers NI contributions, employers pension contributions, other insurances such as health insurance, income protection insurance, the list goes on. The other thing to keep in mind is that he doesn't get paid when he is not at work so he has to put money aside to cover holiday pay, sick leave and time between contracts when he is not at work, so the amount he can charge for his work per day will be considerably more than the amount that he is able to take as a wage (and dividends) from his company.

The costs will vary depending on the business, but the point is that there are a lot of costs involved in running a company. He seems to be paying you a fair amount and to be fairly responsible, please think hard before involving CSA as you could end up with less money, also it will probably damage the cooperative relationship you have with him and it could make things difficult for the children. It would be a lot better to negotiate with him, explain that you are struggling and ask if he would agree to take responsibility for certain things eg school dinners, school trips or whatever on top of the amount he already pays. Good luck

jacklink

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