New arrangements

jlfrs01

Hello all,
I hope this is the right place for this post.
My ex-wife and I agreed Child and Spousal Maintenance which was drafted into a Consent Order over 6 years ago, I'm the paying parent.
In April this year I started a new job, effectively going back into my own business (a consultancy operating as a limited company), following redundancy, the salary I am paying myself is about 60% less than I earned last financial year.
My ex-wife will not agree to a reduction in child maintenance so I am considering starting a claim with the CMS. Thing is, as they will assess based on my salary for last year my payments could increase, not decrease.
I believe I can apply for a variation to use my new salary on which to base their calculations but is this complicated by being effectively self-employed? I am paying myself dividends from the company, the last set of books submitted for 2022 show a loss on the balance sheet.
Clearly, I want to avoid putting in a new claim if it means paying MORE not less.
Appreciate any insights as I don't know how the CMS operates in these circumstances.

themoomins

Poor kids.

jlfrs01

themoomins said:

Poor kids.

Because their poor father has lost his high-paying salary so can't afford to pay at the same rate he has these past 6 years? Both my daughters are independent young women, aged 17 and 18 with part time jobs who spend most of their nights at their boyfriends' homes, they want for nothing materially and emotionally. It never ceases to amaze me how judgemental people can be without having the first clue about someone's situation.

tightauldgit

Having been self-employed and dealt with CMS I can honestly say that I think you'd basically be flipping a coin. 

They will most likely base your initial judgement on whatever has been submitted to HMRC for the past tax year and then you will have to appeal that or make an application for an adjustment based on your new circumstances. And its really up to them if they accept that or not based on the evidence you have provided. I have had it accepted one year and rejected the next time (providing the same evidence both times) 

If you can show a history of earnings from the self-employment with HMRC and evidence of having lost your full-time job it might well work though I'm slightly confused that you say you started in April but have submitted books for 2022. As with everything CMS, there doesn't seem to be any clear rhyme or reason to their decisions and one person can say yes and another no. 

But the basic default is going to be whatever your last tax return said. Given the age of the kids, if you can afford to make the payments it might be wise just to keep paying as agreed for the last few months of the agreement as presumably they will be stopping soon?  

If as you say the kids are no longer spending nights at mum's then it may well be that they are no longer considered her dependent or you might be eligible for much reduced CMS payments as they should be based on how many nights child spends with parents. I'm not too sure how that all works.  

superbigal

I think you still need to pay your spousal maintenance so assume the 2 payments are split ?  Just an observation as I know you can go to CMS after 12 months of a consent order. 

VyEu

Does your consent order have a global maintenance order then? If so, it's a total figure which is reduced £ for £ for any CMS assessment made (as then it would be a legal obligation and not under the court order so the net effect is the same). 

Zarin

Poor kids

jlfrs01

Zarin said:

Poor kids

Meaning what?