Child Maintenance - other party hiding real income help

Margo1980

Hi,

My child Maintenance Calculation for the 2 children I have is tiny. My ex has to pay less than £200 a month. They live with me 75% of the time. He leads a lavish lifestyle in a big detached house (rental) a fancy car, holidays, etc.

The calculation is based purely on "unearned income" of less than £500 a week.

He creates his own companies and then closes them down and starts another. He goes from contract to contract. I've told CMS this, and given them details. He has had a much much higher income than what CMS are basing their calculation on, but he must be hiding it. I've raised this to them, but the calcuation they come back with is only based on this "unearned income" and nothing else. I thought they would look properly into his incomings and outgoings but they can't have. He's lived for years in this way. Can I get some advice please on what to do next? I can appeal the judgement but why haven't they looked properly into this already? How do I push this.

Thank you
M.

tacpot12

This link might help: Child maintenance: Challenging the undeclared income of paying parents (parliament.uk)

If you feel you have provided them with evidence that is credible, you need to follow the complaints process, but first you need to consider whether you really have provided credible evidence, or just hearsay.

Margo1980

Thank you for that. That's a really interesting article.

I have provided information that shows the companies he opens and closes over the years. Also who he has been employed by (contracts) and information about the property he rents (rent is easy over £1000 a month) and he has all the other bills that are associated with that house and area. He clearly earns a lot more than what CMS are basing their calculation on. I don't have access to his actual banking so that is the limit of what I can provide. I'm not happy with the lack of investigation they've actually done.

The article you link to says: "The receiving parent does not need to provide evidence but does need to provide credible information to support the challenge. The receiving parent should not be tasked to source information they do not have."

That's exactly what I've done. Why haven't they looked into his actual bank accounts properly and the bills he has? Do I need to appeal & complain before they do that? The article also talks about the Financial Investigations Unit (FIU) getting involved. I very much doubt they have at this stage.

Thanks again for your help.

swingaloo

Dos your ex live alone?

Exodi

I expect if the CMS had a penny for every time it was suggested that the paying parent leads a lavish lifestyle, lives in a massive house, drives a flash car, is always on holiday, etc, then no-one would need to pay maintenance as they'd have more money than they knew what to do with.

When tacpot12 says credible evidence, I think they are referring to providing the CMS specific examples of the companies he has opened, or basic details of what these contracts or for or who they are with, etc. Something that gives them a lead to investigate instead of just telling them he has a nice car, so he must be minted. I'm not saying you need to provide his audited company accounts, or a copy of his profit and loss, or a copy of one of his contracts, but you don't want to be one of the countless receiving parents that wastes their time contacting the CMS to rant with anecdotes about the receiving parent being absolutely loaded.

Do you think if he was to describe himself to friends, he would describe himself as living a 'lavish lifestyle'?

swingaloo

Exodi said:

I expect if the CMS had a penny for every time it was suggested that the paying parent leads a lavish lifestyle, lives in a massive house, drives a flash car, is always on holiday, etc, then no-one would need to pay maintenance as they'd have more money than they knew what to do with.

When tacpot12 says credible evidence, I think they are referring to providing the CMS specific examples of the companies he has opened, or details of what these contracts or for or who they are with, etc. Something that gives them a lead to investigate. I'm not saying you need to provide his audited company accounts, or a copy of his profit and loss, or a copy of one of his contracts, but you don't want to be one of the countless receiving parents that wastes their time contacting the CMS to rant with anecdotes about the receiving parent seemingly being absolutely loaded.

Do you think if he was to describe himself to friends, he would describe himself as living a 'lavish lifestyle'?

Exactly this. 

My sisters ex paid as little child support as possible but he lived in a big detached house. The house had been rented in his girlfriends name and his flash car was leased, again in his girlfriends name. He also holidays abroad in her parents villa. 
There are also a lot of ways of putting a business in others name and showing you gain very little from it. 

Just as an aside- a friend of mine was convinced her ex was hiding money and paying too little maintenance and was going to great lengths to prove it. The result was that he left his job, went on benefits (but probably still working cash in hand) and she got £5 a week.

mark_cycling00

A "problem" with ltd companies is that the income they receive belongs to the company until it is paid to the employee or to the owner via a dividend. It could make £100k but the owner might only take £12k payroll salary 

This allows the company to save to buy equipment etc.

Now if you close it down you might be able to take the remaining assets eg. the cash as a capital gain rather than income. 

It's pretty hard these days to do this multiple times in the same business sector. Ie illegal. Hmrc might be interested in this....

The company might provide a fancy car as an expense I guess rather than via a salary.

I suspect that maybe the CSA can't force ltd companies to pay money to the directors ex-wife? 

Also the tax rates for doing contract work through ltd companies can be extortionate these days  like nearly 50% so £100k minus car expense, minus tax might only leave £40k left for salary.

It's easy to find all the accounts and closure info about anyone's ltd company online so maybe start there and see if there is any lying going on about income etc

Tryinghardtosave

In my experience, all CMS can use is the HMRC system - it will tell them the amount they have submitted to HMRC as an income, and they will then use this number to calculate what they have to pay. Thing like having other children or the number of nights they have the clidren in question make a big difference to the amount. 

DullGreyGuy

mark_cycling00 said:

A "problem" with ltd companies is that the income they receive belongs to the company until it is paid to the employee or to the owner via a dividend. It could make £100k but the owner might only take £12k payroll salary 

This allows the company to save to buy equipment etc.

Now if you close it down you might be able to take the remaining assets eg. the cash as a capital gain rather than income. 

It's pretty hard these days to do this multiple times in the same business sector. Ie illegal. Hmrc might be interested in this....

The company might provide a fancy car as an expense I guess rather than via a salary.

I suspect that maybe the CSA can't force ltd companies to pay money to the directors ex-wife? 

Also the tax rates for doing contract work through ltd companies can be extortionate these days  like nearly 50% so £100k minus car expense, minus tax might only leave £40k left for salary.

It's easy to find all the accounts and closure info about anyone's ltd company online so maybe start there and see if there is any lying going on about income etc

The LTD is a legal entity in its own right so it absolutely cannot be forced to pay for someone else's kid. 


Who are the shareholders of his company? 
Does he have a new partner? One of the ways SME directors benefit is employing others, others being shareholders etc to spread the profit over multiple people and their tax allowances etc. Plus then benefits like a company car. 

Margo1980

Exodi said:

I expect if the CMS had a penny for every time it was suggested that the paying parent leads a lavish lifestyle, lives in a massive house, drives a flash car, is always on holiday, etc, then no-one would need to pay maintenance as they'd have more money than they knew what to do with.

When tacpot12 says credible evidence, I think they are referring to providing the CMS specific examples of the companies he has opened, or basic details of what these contracts or for or who they are with, etc. Something that gives them a lead to investigate instead of just telling them he has a nice car, so he must be minted. I'm not saying you need to provide his audited company accounts, or a copy of his profit and loss, or a copy of one of his contracts, but you don't want to be one of the countless receiving parents that wastes their time contacting the CMS to rant with anecdotes about the receiving parent being absolutely loaded.

Do you think if he was to describe himself to friends, he would describe himself as living a 'lavish lifestyle'?A

As I said, I have provided that information.

I've provided the exact details of all the companies he has opened and closed.

I have provided as much information as I possibly can of all his contract employment for the last 10 years+. Names of companies, and start/finish date.

I've provided pages of information. Anyway thanks for your help.

Margo1980

DullGreyGuy said:

mark_cycling00 said:

A "problem" with ltd companies is that the income they receive belongs to the company until it is paid to the employee or to the owner via a dividend. It could make £100k but the owner might only take £12k payroll salary 

This allows the company to save to buy equipment etc.

Now if you close it down you might be able to take the remaining assets eg. the cash as a capital gain rather than income. 

It's pretty hard these days to do this multiple times in the same business sector. Ie illegal. Hmrc might be interested in this....

The company might provide a fancy car as an expense I guess rather than via a salary.

I suspect that maybe the CSA can't force ltd companies to pay money to the directors ex-wife? 

Also the tax rates for doing contract work through ltd companies can be extortionate these days  like nearly 50% so £100k minus car expense, minus tax might only leave £40k left for salary.

It's easy to find all the accounts and closure info about anyone's ltd company online so maybe start there and see if there is any lying going on about income etc

The LTD is a legal entity in its own right so it absolutely cannot be forced to pay for someone else's kid. 


Who are the shareholders of his company? 
Does he have a new partner? One of the ways SME directors benefit is employing others, others being shareholders etc to spread the profit over multiple people and their tax allowances etc. Plus then benefits like a company car. 

He's the only director on the company, it's just a one man band each time. Yes he's doing whatever he can to avoid paying tax (or provide for his children). 

Yes he does have a new partner, but that's a relatively new thing.