Using an umbrella company to avoid child support

DUTR

Kimberlay wrote: »

Your missing the point........ Pay for your children based on your true, income, it's capped for anyone on a high salary. Which is fine. My children feel insignificant they feel they are not wanted by him. He has not seen them in 7 years. He got a contact order, and then broke it himself. I want advice not judging, please .

You have had advice, appeal.
It's the title of the thread that has skewed the answers type you were hoping for.

POPPYOSCAR

He is obviously not 'employed' by the airline or he would not be able to do this.

HoneyNutLoop

Kimberlay wrote: »

I'm not concerned about his tax liabilities guys.

Your problem is linked to it though - they are inseparable issues. To understand how the CSA or CMS calculates income you need to understand the UK tax system - what is his money, what is the company money. You will get nowhere fast if you keep putting forward the argument that the company money should all be used as his money for child support. Legally, it's not his money and legally is what counts for this issue.

Start by looking up his company on companies house and see if it has filed any accounts yet. It's likely the company will be a microentity, so only very limited accounts need to be filed, but it's a starting place.

You say in your op the case is with the CSA - can you confirm this is correct and that it's not with CMS, as the rules for each scheme are different. A number of people use the two terms interchangeably, not realising it will affect the relevancy of the advice they are given, so I just wanted to double check.

Kimberlay

I've been in contact with the CSA/CMS for 10 years. They cannot do a thing. He has no dividends, and post accounts yearly. His company has £5,000 capital. No assets. He is working for a Chinese airline and is paid tax free. He gets $18,000 a month. He is hiding his money from HMRC. I don't care about that. I wish he would pay a respectful sum to his children.

Caz3121

it sounds like he does not have any UK income so it will be a case of how much time he spends in the UK
If under 183 days per year he will be due no tax in the UK and you would likely need to use REMO
If over 183 days per year, he will be responsible for tax on his worldwide income and he has chosen a tax efficient way to reflect it
As has been said on other posts, request a variation based...I assume he maybe has a house and car...are these the types that someone with a £600 income would live in/drive?

jblessing

Unless your ex is truly a freelance pilot (i.e. works for several different airlines) then I suspect his work would fall under IR35 regulations (https://www.gov.uk/guidance/ir35-find-out-if-it-applies) , and would be classed as tax evasion as his tax return explicitly asks a question about this.

You could always use https://www.gov.uk/report-an-unregistered-trader-or-business to report him

HoneyNutLoop

Kimberlay wrote: »

I've been in contact with the CSA/CMS for 10 years. They cannot do a thing. He has no dividends, and post accounts yearly. His company has £5,000 capital. No assets. He is working for a Chinese airline and is paid tax free. He gets $18,000 a month. He is hiding his money from HMRC. I don't care about that. I wish he would pay a respectful sum to his children.

Is all that money shown in his company accounts as turnover? If it is, he's not hiding it from HMRC. It's fully declared, as his company's turnover. Then the company gets to deduct a whole gamut of business expenses, including his wages, before arriving at a profit figure on which it must pay corporation tax. That profit is the company's, not your ex's, and so will not normally be taken into account when calculating child maintenance.

If that money is not being declared as company turnover, you'll need to consider Caz3121's post. If he isn't spending much time here, where is he spending it? If China, you can't use REMO as the UK doesn't have a reciprocal arrangement with China. Your comment saying the income is tax free suggests that maybe he is not classed as a UK resident for tax purposes.

https://www.gov.uk/tax-foreign-income/overview

You may not care about him hiding money from HMRC, that's your prerogative and no-one's asking you to. But you seem to be failing to realise that in the overwhelming majority of cases, child maintenance is based on declared personal income to HMRC. If he doesn't have to declare his foreign income to HMRC because of residency rules, the CSA can still take it into account if they can verify the amount of the foreign income.

See this appeal decision for details: http://www.osscsc.gov.uk/judgmentfiles/j3370/CCS%200390%202011-00.doc

So, first things first - is the $18,000 a month being paid to your ex's company or is it being paid to him?

If it's being paid to the company, and it is retaining a high proportion of it's profits within the company, you could apply for a variation on the basis of diversion of income. This ground if for when someone has the ability to control the amount of income they receive, could pay themselves more but instead divert the money by paying it to someone else or leave it in the company. If it's left in the company, the CSA will consider if the money is being retained for a reasonable business reason. If they determine it is, they won't award you a variation.

As you have a CSA case, rather than a CMS one, you could also apply for a variation on the basis of lifestyle inconsistent with income declared. You would need to know a lot about his expenditure for this type of application to succeed.

This is an example of an Upper Tribunal decision where the outcome is that the variation was not allowed:
http://www.osscsc.gov.uk/judgmentfiles/j4699/CCS%205490%202014-00.doc

This is an example where one was allowed:
http://www.osscsc.gov.uk/judgmentfiles/j2697/CSCS%2014%2020081.doc

Have you previously tried applying for a variation?

Guest101

Kimberlay wrote: »

Your missing the point........ Pay for your children based on your true, income, it's capped for anyone on a high salary. Which is fine. My children feel insignificant they feel they are not wanted by him. He has not seen them in 7 years. He got a contact order, and then broke it himself. I want advice not judging, please .

I have a question: how much do you contribute to the household?

Poppie68

Guest101 wrote: »

I have a question: how much do you contribute to the household?

Well obviously enough to put a roof over their heads , feed and clothe them and any extras that comes from having kids.

Guest101

Poppie68 wrote: »

Well obviously enough to put a roof over their heads , feed and clothe them and any extras that comes from having kids.

Well that could be coming from me, or you, or anyone else.


I was simply curious how much the OP contributed.