Most efficient way to pay child maintenace to ex

[mouseorgan]

Hi,

I'm going to need to start paying a large amount of child maintenance to my soon to be ex wife, and I'm trying to find out if there are some good and effective, and legitimate ways to minimize the tax that is taken from it.

From my contract income, I'm anticipating a something over £1k a month and don't really like the idea of having to pay corp, then my own NI / dividend tax, and then my ex to pay tax again if she has to declare it on her own income too.

Currently she's a 50% shareholder, which I presume will need to change...? Without being a married couple any more, the whole "Arctic Systems" married income thing would no longer be appropriate.

We're friendly and get on well, so don't think I'm in any personal "danger" of abuse or such from any arrangement with her, and naturally want to bring down the tax liability between the two of us as much as possible. Is there any way I can pay her from my company rather than from myself for example?

Thanks

[BrilloPad]

She might claim later that monies are nothing to do with child maintenance.

IMO consider yourself lucky things have been amicable so far. Gets things done properly.

[northernladuk]

Firstly, and this is in my opinion and have never been in this position but if you have split up with your partner you want to get her off your books. Your relationship has changed so this should be reflected in your company set up. You are lucky it is amicable now but if this doesn't work out it could go rapidly down hill and you will possible end up having to disolve your company and pay all sorts of extra taxes on top of what you are doing now.

If you do pay her from your company to reduce tax on what is a personal issue I cannot see how this could not be classed as evasion. Again, you say everything is ok now but we have had many posts here from people in your situation ranging from 'friendly' to outright war and I bet many of them have gone from one to the other over time.

I would personally look at her relationship to your company first before anything else.

We do have the child mainenance question come up a lot as well so a search using 'child maintenance site:forums.contractoruk.com' in google will throw up a lot of interesting reading. Could try 'child maintenance site:forums.contractoruk.com/accounting-legal' to filter the stuff out from general as well.

[mouseorgan]

I'm certainly not looking to evade anything, I'm just presuming that with everything fully declared, this money will be heavily taxed more than I hope is necessary... I had a search but couldn't see anything massively useful, I'm sure what I'm actually asking could be answered for a pile of other scenarios not just my specific one, just how I can efficiently give a moderate amount of money to another person without us both getting clobbered if it's at all avoidable.

We're not expecting to be going anywhere near the CSA or anything, we just want the best for everyone involved, HMRC excluded!

[mouseorgan]

She might claim later that monies are nothing to do with child maintenance.

IMO consider yourself lucky things have been amicable so far. Gets things done properly.

I'm just asking what "properly" would need to consist of, from the perspective of my company accounts.

[BrilloPad]

I'm just asking what "properly" would need to consist of, from the perspective of my company accounts.

payments for child maintenance are never going to be business expenses.

So IMO you should pay the money to yourself then sort out your ex from that.

[JamJarST]

I'm just asking what "properly" would need to consist of, from the perspective of my company accounts.

Just pay for it through the business just like you do you personal mortgage, utility bills and grocery shopping. You do claim all your groceries don't you?



Where is he sarcasm smilie?

[Sockpuppet]

Anyone else wondering why HMRC have such a hard on for contractors?

[pmeswani]

Anyone else wondering why HMRC have such a hard on for contractors?

Because we are easy target, and look extremely attractive?

[northernladuk]

Because some of us are easy targets, and look extremely attractive?

Don't tar us all with the same brush lol!