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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33954
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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My husband and I are separated, with a 4 year old daughter.

Resolved Question:

My husband and I are separated, with a 4 year old daughter. He is self-employed (Limited company). So he is both a Director and employee of the company. He pays himself around £20k/year and pays me just under 15% of his net salary each month. However, his company earns closer to £80k/year. I *believe* that he takes money out of the business each year and pays it to himself as 'Dividends' - I do not see any of this money. It seems to me that he is depriving himself of income to decrease his assessable income. Should his entire earnings be taken into consideration when it comes to maintenance? In which case is it 12% of gross (after tax, NI and pension?). Thank you.
Submitted: 2 years ago.
Category: Law
Expert:  Clare replied 2 years ago.
Hi
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
have CMS done a formal assessment at all?
Clare
Customer: replied 2 years ago.
Hi there. No. So far we have agreed everything informally between ourselves. I raised the question of dividend payments with him last year but he said he doesn't have to pay maintenance based on his company's earnings, only his. He's the sole director and employee by the way. Thank you.
Expert:  Clare replied 2 years ago.
Hi
He is not correct
The CMS assessment is based on ALL his income - including that from dividends - and the actual rates are set out here
http://nacsa.co.uk/index.php?option=com_content&view=article&id=38:cs3-calculations&catid=2:uncategorised&Itemid=535
Please ask if you need further details
Clare
Customer: replied 2 years ago.
Ok. Thanks for that link. So, to get can accurate weekly figure from him based on last year's income, what document do I need to see? His company accounts? if so what am I looking for? How do I find out exactly what money he took from the business? Thank you.
Expert:  Clare replied 2 years ago.
Hi
You shoudl ask for a Copy of the Annual accounts which will show the amount paid in dividends.
Alternatively you can ask the CMS to do an assessment - they have access to Inland Revenue records
Clare
Customer: replied 2 years ago.
One last question: what if he isn't taking out dividends but simply storing up the money in his business?
Expert:  Clare replied 2 years ago.
Hi
CMS have the power to make an assessment based on that as well!
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33954
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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