Is this true re Child Support Agency and service companies
I have been told by a divorcing dad that CSA ignore his dividend income when computing his income for child support maintenace. This seems bizarre to say the least. He has been running a successful business (not anywhere close to IR35 related contracting work) through a limited company for around 10 years.
Like most other sole shareholder companies he draws a minimal salary and votes himself the balance by way of dividends. I was shocked to hear that the CSA are only interested in his salary. The level of dividends he draws (or indeed could draw, were he to allow funds to build up in his company) is irrelevant apparently.
My friend is very willing to pay significant child maintenance for his son and can afford to pay more than the minimum. However this is all that CSA will direct him to pay due to their antiquated processes and systems. They also refuse to communicate by email.
He tells me that in trying to explain the position to CSA they indicated they are aware of the gap in the rules as they suspect many reluctant fathers leave their jobs and then get re-engaged on a contract basis through a service company so as to reduce the level of their relevant income for child support purposes.
This all sounds quite disgraceful - if it's true. Do any readers of AccountingWeb know what the position is here and how common it is?
- Owner/Director consultant plus employment elsewhere 74 4
- Anyone use Xero for estate agent clients? 144 3
- Easiest and quickest way to reopen dissolved company, for the purposes of having access to funds in the bank account. 311 9
- HMRC Penalties - are they enforceable? 487 19
- Any Need to Formally "Sack" Client Company? 432 5
- Growing pains 119 1
- Residents Association Corp Tax 89 2
- Gift to employee 112 2
- Who can I refer leads to? 363 8
- Cash accounting to flat rate scheme 101 4
- How much to charge for Ltd company accounts ? 120 1
- new capital structure ltd with investors 305 5
- Can Directors be removed without consequence? 137 2
- Benefit of my ACCA membership to my Non Qualified Employer 271 4
- Directors/owners taking too much cash... 1,859 17
- Minutes & Dividend Vouchers 405 12
- Private Healthcare Benefit In Kind 168 4
- PAYE Refund Farce At HMRC 726 9
- I hate HMRC's voice recognition system - The Inept Interrogator 306 8
- SA tax assessments 219 3
- DTR : TIOPA 2010 Section 42 437
- CTA study material 392
- Sect 102 TMA 1970 291
- Sage Forecasting - Print filename 268
- Pre incorp expenses 252
- Relief on French Tax Deposit? 230
- Anyone have clients that use Pay4Later to offer customers credit? 219
- Slight twist on employment related securities 199
- How to claim additional losses after mistake in CT return 160
- What is the tax position if I am working overseas but via a UK agency? 145