Tax Avoidance to avoid child support

Bee_Happy · 14 August 2018 at 4:59PM

Update the last hearing my ex did not appear and they have given another hearing date so he doesn!!!8217;t have non attendance to support any appeal. Will update on this soon after the hearing. CMS have finally completed their re-assessment today. I am in disbelief. Despite having a variation in place they have resorted back to minimum wage again. This is totally wrong. They know it is wrong but don!!!8217;t care. This system is a joke. It could take 2 years through the Tribunals service like previously to rectify this mess! Also I have to wait until April 2019 when I get his tax return also so it!!!8217;s accurate. In the meantime I have no idea how I am going to meet the children!!!8217;s financial needs. It!!!8217;s less than £80 a month he will pay now. If anyone has any ideas apart from the usual mandatory reconsideration, appeals procedure Id be very grateful.

kimplus8 · 22 August 2018 at 8:41PM

I'm sorry to hear that you are having a hard time. I have personally found the whole appeals service quite hit and miss. I started my appeal in 2016 and it was just concluded last month. It was ruled in my favour but only after 2 years of painstaking evidence collecting and finally him being investigated by DWP fraud unit.
If you are struggling with the CMS you can ask them to pass on your case to fraud team. they will allocate you a worker who is assigned to your specific case and they are capable of much more information gathering than the CMS. Often the tribunal will use their concluding for th basis of their appeal decision.
HTH

MataNui · 28 August 2018 at 3:14PM

I think you need to moderate your expectations. You have stated you ex is using a tax avoidance scheme but it sounds like he may just be using the directors loan account. Really you need to know the difference because it will affect your prospects of getting anything and how to go about it.

What you and others posting need to understand firstly is that any money made by your ex in the name of his limited company is not his money and therefore neither you or the CMS have any legal claim on so much as a penny of it. His company may make 100k per year but that belongs to his company. Not him and not you. CMS can only legally go by what he personally earns or takes out by way of dividends etc. The fact that his company earns £XXXX but he only pays himself £X is NOT diversion of earnings and this is probably why you are getting nowhere with CMS currently. They are applying the law correctly and if you are hoping for anything else then you are wasting your time.

On the other hand. If he is taking money out and using some tax avoidance scheme then HMRC is where you need to go first. Until they say what he is doing is not legal and his taxable income is higher than is stated CMS wont be able to help you.

As i said earlier. Diversion of earnings cant be applied to money that legally belongs to another entity. In this case his company. It can only apply to money that he has firstly taken out of the company.

Comms69 · 28 August 2018 at 3:18PM

Can your divorce proceedings not include a child maintenance element?

It's quite common

HoneyNutLoop · 28 August 2018 at 8:06PM

MataNui - you are quite wrong. I think you may need to read the law surrounding the diversion of income ground and some of the related commissioner’s decisions. It may be quite an eye opener for you.

MataNui · 29 August 2018 at 8:37AM

HoneyNutLoop wrote: »

MataNui - you are quite wrong. I think you may need to read the law surrounding the diversion of income ground and some of the related commissioner’s decisions. It may be quite an eye opener for you.

If you are suggesting that CMS are legally entitled to take limited company income into account when calculating payments from directors/shareholders (which it appears you are) then you will need to post some links specifying exactly that as doing so would pretty much undermine the main principles of company law. It would mean directors of FTSE 100 companies for example could find maintenance bills in the tens of millions. Of that i am pretty confident i am correct.

What i may of missed (or not added to the list) is other means of extracting money from companies. (ie the directors loan account) which as far as i am aware (was told by my accountant) is repayable (so not quite what the OP is suggesting).

I did try to look at the link you posted earlier but it appears to not be working.

HoneyNutLoop · 29 August 2018 at 6:00PM

I posted that link 18 months ago.

This is a link to the law governing diversion of income regulations.
http://www.legislation.gov.uk/uksi/2012/2677/regulation/71/made

If the evidence could demonstrate that the specific director of a FTSE100 company had the ability to control the amount of income they received from the company, whether directly or indirectly and 71(1)(b) was satisfied, then yes, potentially. However, demonstrating 1 single director of a FTSE100 company had that level of control of the company would be difficult.

This is a link to Upper Tribunal decisions. You can search and filter for different circumstances such as diversion of income:
http://administrativeappeals.decisions.tribunals.gov.uk//Aspx/default.aspx

Having only briefly rescanned, this one appears to have some points of relevance when considering diversion and retention of profits within the business:
http://administrativeappeals.decisions.tribunals.gov.uk//judgmentfiles/j4854/CCS%202524%202014-00.doc

Bee_Happy · 13 February 2019 at 5:47PM

Thanks to all that replied. As request in a previous post my ex was using an umbrella scheme which paid his salary as a loan. This is not a limited company or a directors loan.
My case finally concluded 20th dec 2018 and like someone else’s post took two years to be resolved. I would advise anyone on here having a lengily case to record all the errors on the tribunals part causing unnecessary delays as after exhausting the complaint procedure I received 750.00 compensation. Hardly anything in comparison to the distress but better than nothing.
In response to adding a maintenance support to the divorce this only lasts for a year and could prove quite a costly exercise over a long period and his payments adjust regularly. I suspect the family courts would refer me to the CMS eventually.
My advice to anyone in my position is to pursue it as the decision was in my favour and the income paid as loans was taken into consideration as income, a diversion of income was agreed. The CMS have now calculated his arrears over 8k minus the minimum wage payments. Overall a very good result!

pinkyP_2 · 12 April 2019 at 6:00PM

Beehappy, I’ve just today received a letter with my child maintenance calculation which has been worked out at £50 per month. I called them and they said my ex is registered as employed. Well, I know in the past he has used a tax avoidance scheme and imagine he is doing that now, because there is no way whatsoever in his line of work that he is earning £200 per week. However, using opus bestpay that is the amount he will be taxed on by hmrc. I explained this to the cms but they said basically it’s on me to provide evidence that he’s being deceitful. So I am at the start of my battle, and wondered what evidence you needed to have in order to take this matter further?

We have been separated for a year and I have no dealings with him due to domestic abuse. I have no evidence but simply looking at his bank statements would provide this. I’ve contacted hmrc but I don’t think they can actually tell me anything anyway. I simply made them aware of his history with these schemes and what the cms have found.

I feel a bit sick that he might not have to pay our daughter what he should. I do plan to take this as far as I can.

Any advice appreciated thank you &#55357;&#56842;

BoGoF · 12 April 2019 at 6:06PM

If he has been participating in a disguised remuneration loan scheme then chances are he is going to face a huge tax bill very soon. HMRC are catching up with these schemes and those involved are facing tax bills going back many years.

Tax Avoidance to avoid child support

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free