Does the CSA consider dividends?
Contractor's Question: Does the Child Support Agency take only income into account and not dividends when determining maintenance payments? Or is it the case that the CSA can take all income streams into account, which seems fair, but doesn't often look at dividend payments made by limited company owners?
Expert's Answer: When the Child Support Agency is assessing the income of a director of a limited company it will usually do so with regard to all the various sources of income that director may have.
As you may be aware, as well as unearned income or any additional income from other employment, company directors may benefit from some or all of the following:
• remuneration (earnings);
• share dividend(s);
• debenture interest; and/or
Consequently to enable it to make an accurate calculation of a director's earnings, the agency will usually request sight of company accounts and/or self-assessment tax return details. It is normal for the accounts/self assessment details to reflect a period of not less than 6 months, which ended in the period not more than 24 months prior to the request for assessment.
That said, given that on occasion companies may experience dramatic fluctuations in business activity (for example because of the loss/gain of major contracts or perhaps in light of increased competition), in such circumstances the agency can use its discretion to gather evidence of income from a period other than that stipulated in the previous paragraph. Before it does so, the agency should be satisfied that the usual accounting period (as described above) would not provide an accurate reflection of earnings.
If you require further guidance, please contact the National Help Line on 08457 133133 between 8am to 8pm Monday to Friday, and between 9am and 5pm on Saturdays.
The expert was Helen Darwent, at the Liverpool office of the Child Support Agency.