If I am self employed as a business partner and have made a loss on my business for the past two years, do I still have to pay child maintenance?
We have a private arrangement in place, I have two kids overnight 3 nights a week, she makes sure I don’t quite have 50/50 care so she can get her monthly payment of £100 a month. I recently had them for 3 weeks in a row as I had covid and she didn’t want to risk catching it and missing her social event she had planned. She said I could ‘adjust the maintenance payment accordingly’, so I didn’t pay for that month. She then decided she did want her money for that month after all so she has gone to CMS to say I didn’t pay her and to contest how much I have to pay her. It has always been a private arrangement but I have checked what I owe her through the child maintenance calculator.
However, I pay myself a small salary from my business as I need to live, but my wife earns more than me in her job so she is the main bread winner. I asked my accountant what my gross earnings were for the last year and he said £0.00
So I have now found out that as my business has made a loss over the past two years, I have paid no tax and not technically earned any income.
Does this mean she is not entitled to any payments? I will always pay for my kids but if she is going to get nasty I need to know where I stand as self employed making a loss. She earns £50k a year so she is very comfortable and splurges on the kids all the time whilst I scrape by and can barely afford to give them pocket money. It is very much a control issue for her not a financial issue.
Advice appreciated!
Hi,
If she has gone to CMS, they will check your income records for most recent tax year. Most likely they will see the £0 amount and state that you pay nothing. They may ask you to get your accountant to do a projected earnings for next 12 months.
Uploaded the SA100 as requested which shows nil gross income.
CMS ask how I am supporting myself if i have no taxable income and no UC.
Truth of the matter is my wife pays household bills through my part time job income, completely seperate from the business.
I take a small amount from the business each month for personal expenses which has been funded by my wife’s dad who has seed funded the start up of the business with a loan from his own business.
Anyone who knows anything about business knows it takes 3 years to turn a profit/break even. So my wife’s dad has loaned us the money to get set up and to pay me a small salary which is not taxable as the business is making a loss.
Question is: can CMS charge maintenance on loans you are receiving…?
hi,
when CMS asked how you are supporting yourself, did you give them the same explanation? with the loans I think it depends. if CMS want to investigate the business they could possibly class the loans as income, and perform a maintenance calculation on that. it is usually the salary or dividends taken from business that they focus on.
you could ask your accountant to send them a letter stating some information about your business.
if your interested, there's a good group on facebook for paying parents https://www.facebook.com/groups/239699060076601
I’ve emailed my accountant for advice and a statement that I have been supporting myself through a loan from family. As this is not taxable income I’m hoping they won’t charge CM on it. I guess I’ll have to wait and see!
@t11 if your partner is supporting you with their job, can let CMS know about it. nothing wrong with that.