Self employed

Whitevandan

Has anyone who is self employed had to sort out their Child support? I get paid different amounts each month. I have suggested that I show her my invoices monthly and we use the online calculator to make sure it's right but she seems to think I'm up to something and won't accept it.

How would the csa do it?

MataNui

How long have you been self employed? CSA used to work off the last full years tax return. Not sure how CMS do it. Either way having an income that can vary massively from year to year is a fast track to bankruptcy with the CSA. If you have a good year they will backdate it, if you have a poor year then its just tough.

Also being self employed with CSA means they run your business, not you. For example: Want to save for that new van to expand your business? Cant do that with CSA. All the money is up for grabs. Every penny of profits. Also CSA could (dont know about CMS) dis-allow some things HMRC would let you claim as expenses. Self employed with CSA liability is a !!!! situation to be in.

If you gross more than about £20k its better to set up a limited company. That way you pay yourself a fixed salary and thats all CSA can touch. It means you know from year to year what you will be paying. It also means you can save a war chest for future expansion, replacing equipment or just to fall back on if you get a bad year.

noodledoodle78

CMS will take your last years tax records from the HMRC and work out your payments from that. They work from the profit element of your company/ self employed status. For example last year you turned over £30,000, but had costs of £18,000 which included your tools, van running costs etc. They will work out your payments based on the £12,000 of profits.

Hope that helps. Any questions please ask. My husband is self employed and this is what they did with us.