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  • FIRST POST
    • Bee_Happy329
    • By Bee_Happy329 11th Feb 17, 8:41 PM
    • 6Posts
    • 1Thanks
    Bee_Happy329
    Tax Avoidance to avoid child support
    • #1
    • 11th Feb 17, 8:41 PM
    Tax Avoidance to avoid child support 11th Feb 17 at 8:41 PM
    I'm on here to see if anyone can help me with my struggle using the child maintenance service. My ex is a self employed accountant who started using a Tax avoidance scheme when we split. We are also going through divorce proceedings. The problem is the scheme allows him to divert his earnings to them and they pay him minimum wage and the remainder of his salary as a loan which is never repayable. In doing this it is not subject to Tax. Since the CMS will only consider taxable earnings he pays 14 per week for 2 children and earns 50k a year. This seems incredibly unfair on the children. I have appealed the decision and it's taken the CMS an excruciating 12 months to even submit their information and responses to the Appeals Tribunal Court. I'm still waiting for the hearing in despair!!! In the meantime he has benefited by avoiding paying 7000 worth of child support for the past year. I've been told by CMS that they cannot say this is a diversion of earnings even though I have provided a financial declaration and bank statements from the ex (provided for the divorce) stating his earnings are 50k, apparently that's not enough evidence. This is crazy what do they want? Even though they have everything they need it still isn't enough because loans are not taxable. I'm now waiting for the appeals tribunal who will more than likely tell me the same!

    Has anyone gone through the appeal tribunal for child maintenance and been successful? Please share your experience and help is much appreciated.
Page 1
    • jimd-f
    • By jimd-f 12th Feb 17, 9:50 AM
    • 141 Posts
    • 65 Thanks
    jimd-f
    • #2
    • 12th Feb 17, 9:50 AM
    • #2
    • 12th Feb 17, 9:50 AM
    the appeals tribunal will look at the facts of the case and see if CMS have applied the law correctly.
    in your case they appear to have done so as they have used the income declared to HMRC-the CMS scheme assess people on their gross income before tax;loans from the company are not considered to be income
    you need to contact HMRC and try to get them to take action, which may eventually help you to get reassessed at a more realistic level.
    • DODO
    • By DODO 12th Feb 17, 11:26 PM
    • 1,529 Posts
    • 31,852 Thanks
    DODO
    • #3
    • 12th Feb 17, 11:26 PM
    • #3
    • 12th Feb 17, 11:26 PM
    Hardly ever post but felt I had to - not sure why you have been advised to appeal. Surely you need to apply for a variation based on diversion of income. Cant attach links but if you google it will come up I'm sure but best info is on citizensadvice.org.uk. Think it will only be backdated to when you ask for a variation so don't delay

    Good luck

    Sorry just reread and it may be you have asked for a variation


    IF all else fails contact your MP and get them to get involved - I got a response within 2 days of MP writing a letter to them asking to be kept upto date about my case.....
    Last edited by DODO; 12-02-2017 at 11:30 PM.
    • Bee_Happy329
    • By Bee_Happy329 13th Feb 17, 2:11 PM
    • 6 Posts
    • 1 Thanks
    Bee_Happy329
    • #4
    • 13th Feb 17, 2:11 PM
    • #4
    • 13th Feb 17, 2:11 PM
    Thanks both for your reply. I have applied for a variance and diversion however the CMS still stand by their decision. If all else fails my ex will have to pay through the divorce but still benefit from not paying the arrears. I have contacted the Tax hotline who seemed very interested in the scheme but whether this ever pays off I will not know. There is a loop hole in the law. Apparently tax avoidance is ok but tax evasion is illegal and it all comes down to the percentage of tax avoidance very confusing. His service boasts 93% take home.
    • HoneyNutLoop
    • By HoneyNutLoop 13th Feb 17, 2:41 PM
    • 479 Posts
    • 377 Thanks
    HoneyNutLoop
    • #5
    • 13th Feb 17, 2:41 PM
    • #5
    • 13th Feb 17, 2:41 PM
    You may wish to acquaint yourself with this Upper Tribunal decision, which focuses on the interplay of the latest child support scheme's requirements on the calculation of income and a different tax avoidance scheme, as it may offer some insight on factors the Tribunal may consider in your case:
    http://administrativeappeals.decisions.tribunals.gov.uk//judgmentfiles/j4981/CCS%200271%202016-00.doc

    There are further Upper Tribunal decisions on the subject of diversion of income as well as director's loans, but they all relate to cases administered under prior child maintenance schemes, so may not be relevant/applicable in your case.
    I often use a tablet to post, so sometimes my posts will have random letters inserted, or entirely the wrong word if autocorrect is trying to wind me up. Hopefully you'll still know what I mean.
    • Bee_Happy329
    • By Bee_Happy329 7th Jun 17, 4:33 PM
    • 6 Posts
    • 1 Thanks
    Bee_Happy329
    • #6
    • 7th Jun 17, 4:33 PM
    • #6
    • 7th Jun 17, 4:33 PM
    The first hearing seemed successful. Both my ex and a representative from the CMS were present. The Judge and CMS seem accepting my ex's income is not correct as they have adjourned now so the judge can have a financial member to assist in making directions to obtain information to determine the ex's income for the period.
    • Bee_Happy329
    • By Bee_Happy329 14th Apr 18, 7:40 AM
    • 6 Posts
    • 1 Thanks
    Bee_Happy329
    • #7
    • 14th Apr 18, 7:40 AM
    • #7
    • 14th Apr 18, 7:40 AM
    Thought I!!!8217;d keep people updated on my progress with the Tribunals service. To date there has been no subsequent hearings due to the tribunals failure to provide a financially qualified person to assist the Judge. I!!!8217;m on complaint number 4. I finally have a 2nd hearing date a year on!!! What the hell is wrong with this service. I started the process in 2016 it is now April 2018 and I still haven!!!8217;t been able to obtain the arrears owed to the children. This service is completely inadequate and even though I!!!8217;ve contacted my MP several times nothing gets done and no one seems to care!!! Judges take their time sitting in cases and the clerks blame them, absolutely useless!!! Nonetheless I!!!8217;m continuing with the process but this is enough to drive you mad, I want it over and done with. We are now discussing financial information 2 years old and I still have ongoing issues regarding calculations after that which are incorrect this is never ending because of this useless service!!!
    • D_M_E
    • By D_M_E 14th Apr 18, 4:45 PM
    • 1,437 Posts
    • 63,303 Thanks
    D_M_E
    • #8
    • 14th Apr 18, 4:45 PM
    • #8
    • 14th Apr 18, 4:45 PM
    Have you tried a written complaint to HMRC about the tax evasion offered by the company and taken advantage of by your ex?

    If there's a lot of people taking advantage of it then HMRC are more likely to do an investigation and put a stop to it, particularly if there are more people in your situation, and this would likely help your case.

    Would also leave your ex with a big backdated tax bill as well as a big backdated support bill.
    • Ettenna
    • By Ettenna 19th Apr 18, 3:35 PM
    • 631 Posts
    • 896 Thanks
    Ettenna
    • #9
    • 19th Apr 18, 3:35 PM
    • #9
    • 19th Apr 18, 3:35 PM
    My ex was using a tax avoidance scheme based on the Isle of Man. He is still being investigated by HMRC under IR35. He paid himself a pittance and too the rest as dividends. The CSA calculated his payment as about 6/week. I asked for mandatory reconsideration for a variation of earnings and went to Tribunal and won as they had not applied the law correctly. He is now paying off arrears and my daughter is now 21!
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