IT Contactor - CSA

[bob132]

Hi,

Firstly, I've always paid my ex more than enough for our son for the last 7yrs! Never missed a payment!
I also have him 2/3/4 nights a week depending upon work committments and weekend time she has with him
etc.. and I have a great relationship with my son who I take skiing every year and away on weekend trips etc etc.. I am a father who is there for him and I help him in every way possible, take him to school etc.. etc..

His mother gone to the CSA seeking more money as I have switched to contracting the past year or so.
The CSA at this stage are working as go between/mediator - they are not officially investigating me as things have been amicable between us since we split 7yrs ago.

I am an IT contractor, paid through an umbrella company and take advantage of reduced tax rates. I have explained to the CSA that I earn the amount that the umbrella company submit on my self assessment tax forms and have this year submitted accordingly.

Based on this amount the CSA advised me of what I should pay her and I do so. I have also offered (my ex not the CSA) to double this as it is low and she has refused it 3times and wants to contunie with the CSA.

The CSA have told her they cannot do anything until I file my self assessment (which I have done) and she is obviously holding out to see if she will be awarded more - which she wont because I am paying her the correct amount based on my "income" submitted.

Where do I stand though as what I actually earn is considerably more and the money does go in to my UK bank account weekly. It is not classed as earnings though but I do have that money in there..!

I dont feel I have lied to CSA about my earnings as the UK government/tax office is happy with the way I conduct things and I am not breaking any UK laws earning in this manner.

If I am investigated, which I dont think I will be, and they looked at my bank account, could they re-assess things and make me pay any form of back payments?!

Advice appreciated..
Thanks
Bob!

[Kanye]

A few things I don't understand....

If you are a working through an umbrella company then you are effectively PAYE right, with limited opportunity for tax planning and no need to submit a self assessment? Is this some other scheme rather than a typical umbrella?

Are you also saying that as well as under declaring your income to your ex, you are also under declaring your income on the self assessment? That's obviously a dodgy spot to be in if the CSA are snooping through your accounts.

Not judging but clearer details would help here.

Im no expert, but the CSA are generally pretty powerful, and they will probably get their hands on that excess if it is there. If there is no undeclared excess income then you have nothing to worry about!

If I was ever in this unenviable position, I would always try to do the right thing with regards to paying maintenence. However, if she tried to nail me to the wall, I would then go on the offensive. I'd stop paying, I'd work abroad, put money through different LTDs, put dividends in a mates name etc. I'd even quit and go back to university or something rather than bend over and fund someone elses lifestyle.

[bob132]

I use a pay company that offer Umbrella services but take advantage of a tax loophole. I am not limited company, and I am Self Employed and DO have to submit self assessment. It is some other scheme rather than typical umbrella and I am Outside of IR35 regulations: IR35 Status - Employed or Self-Employed | IR35 & IR56 | Tarpon

I am not entitled to tell me ex how much I earn and therefore do not.
I am NOT under declaring what I earn to the taxman.

I refuse to be ripped off just because I have a successful career. BUT similarly I need to know where I stand legally.

If my scenario is something that cannot be answered online perhaps I should speak to a solicitor?! Would they be aware of the contracting scheme I am using and know the answers? I don't even know what type of solicitor to see in the real world..?!

[Mojito]

CSA is the least of your worries

If you're in a scheme then it's HMRC you need to worry about rather than the CSA. Take a look through the "HMRC enquiries into scheme xxxxx" threads on this forum....

My advice is to get out now if you want to be able to contribute to your kids future going forward rather than face bankruptcy in a few years. Get into a legit umbrella like ContractorUmbrella and then you can have a very transparent discussion with the CSA along to 15/20/25% of take-home pay as your child maintenance.

[Kanye]

If the CSA base calculations off of the self assessment and your self assessment is 100% watertight with HMRC then you might be able to blag this.

However, if you are declaring say $10 month in income and $15 is hitting your personal account then I cannot see how you are accurately representing your financial picture to HMRC or the CSA.

With the CSA potentially digging into your accounts, you're treading on very dodgy ground here. I assume they can whack you quite hard if they conclude that you are hiding income, and I'm sure they would be happy to refer the case to HMRC if it's all too opaque.

I would 100% get out of this scheme and move to LTD or a regular Umbrella. At least you're then only dicing with one nasty government agency :-)

[Wanderer]

I use a pay company that offer Umbrella services but take advantage of a tax loophole. I am not limited company, and I am Self Employed and DO have to submit self assessment. It is some other scheme rather than typical umbrella and I am Outside of IR35 regulations: IR35 Status - Employed or Self-Employed | IR35 & IR56 | Tarpon

Oh dear. I think you are going to have much bigger problems than the CSA once HMRC catch up with you....

[stek]

IT Contactor - CSA

Loophole? Oh dear! Tell us, could do with a Monday morning dose of Schadenfreude....