CMS and HMRC - Redirection of earnings

Louise9876

Hi there, 

The CMS have advised that I report the other parent to HMRC as he is only declaring £6.2k a year earnings. No dividends or other income has ever been declared. 

He is 50:50 shareholder in his own limited company. It’s been trading for 5 years. There are 4 companies under the parent company. 

The other business partner is also his partner who he lives with. They have a mortgage on a property bought for £475k in 2017. The business is run from home and some areas of the house are used to run the business. 

They are running 2 vehicles. 

He claims not to have his own bank account and the limited payments that have been made to support his 3 children have been paid by his partner through her personal bank account. 

Although they are 50:50 shareholders, the last set of company accounts only had the other business partners name down against credits and loans. They seem to be late submitting this years accounts and none were submitted on companies house for last year. 

Can someone please suggest what creative accounting/tax avoidance strategies they may be using? I need to try and understand what may be happening before I contact HMRC. 

Thank you. 

tightauldgit

Without seeing the accounts we can't really tell you but I imagine what is happening is that the company is paying the other partner enough for the couple to live on and your ex is only taking a minimal amount in order to minimise their child maintenance payments to you. 

In which case I don't think HMRC would really be that interested as I don't think that's in any way illegal. 

You'd really have to see other partners submissions to know what's going on but as I'm sure you know the other partner's earnings are not relevant to your child maintenance case so wouldn't help you anyway.