How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Clare Your Own Question
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 34272
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
13262538
Type Your Law Question Here...
Clare is online now

There, I am the father of 2 children I have

Resolved Question:

Hi There,
I am the father of 2 children for whom I have been paying maintenance through the CSA.
I am the sole director and employee of a small company contracting engineering services. I am a minority shareholder in the company (my parents are the majority shareholders.
I have just been reassessed by the CSA who claim that as a sole director, all the dividends declared by the company are classified as my income, even though the majority is paid to my parents.
My question is whether there is any legal basis (e.g precident / judgement) which justifies their actions?
Thank you in advance,
Gavin.
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.
How did your parents come to be Shareholders in your company?
Clare
Customer: replied 2 years ago.

Hi Clare,

This is how my accountant set things up at the outset to make things tax efficient. Both my parents are retired so they can benefit from the dividends without incurring tax liability.

Hope this helps,

Gavin.

Expert:  Clare replied 2 years ago.
Hi
So they have made no direct contribution to the firm whatsoever?
Clare
Customer: replied 2 years ago.

Hi Clare,

Other than helpful advice, no.

Gavin

Expert:  Clare replied 2 years ago.
Hi
I see
Then I am afraid that the CSA can indeed do this
It is contained in S71 here
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/184683/cmec-si-csmc-regs-2012.pdf
This replaced earlier provisions discussed here
http://www.newlawjournal.co.uk/nlj/content/could-do-better
Please ask if you need further details
Clare
Customer: replied 2 years ago.

Hi Clare,

Not the answer I was hoping for, but thank you for your prompt and efficient replies.

I just have one further question, if the directorships changed such that my parents were joint directors and I was just an employee without directorship, would this change the situation?

Thank you

Gavin.

Expert:  Clare replied 2 years ago.
Hi
Highly unlikely given the circumstances you have outlined
Clare
Clare and other Law Specialists are ready to help you