Company Cars

Polly2013

Hi

My partner has 3 children who he pays for under CSA3. He has just been told that he is now entitled to a company car. We are trying to work out if this worth taking. Part of this calculation is whether it would push up his payments under the CSA (alongside tax and NICs). Can anyone tell me if the value of the car (not a car allowance) would be included in his gross salary and therefore be included by the CSA?

Thanks.

HoneyNutLoop

The Child Support Maintenance Calculations Regulations 2012 state that when the calculation is based on historic income, the HMRC figure is the amount identified by HMRC under the PAYE regulations under part 2 of ITEPA, and company cars appear to be brought in as income under that part. So, it would appear possible on the face of it that the cash equivalent calculated for tax purposes may be counted as income for child support.

This seems to be confirmed when reading the regulations for calculations based on current income, as Reg 38(4) says:
"(4) Where the earnings from the non-resident parent’s present employment or office have, in the past 12 months, included amounts treated as earnings under Chapters 2 to 11 of Part 3 of ITEPA (the benefits code) the non-resident parent’s current income is to be taken to include the amount of those benefits as last obtained by HMRC divided by 365 and multiplied by 7.


So I would say yes it will be included. However, if this change is taking place part way through your child support year, a review will only be completed if it increases his income by 25%. Otherwise, it will only be taken into account at the annual review.