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CMS calculations result in being taxed twice


Posts: 3
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Topic starter
(@zkwilh06)
Active Member
Joined: 2 weeks ago
 

I've recently been pondering and giving some thought to the fact that payment schedules are calculated before tax salary figure yet payment is taken after tax.

By rights, the calculations should be after tax if payments aren't being taken from salary. 

I've challenged CMS on the fact that calculation is pre tax and the payment is after tax and they said it was bad but that is how the legislation was written. I've looked into the law when it was introduced but nothing jumped out at me. It's just a properly backwards implementation. I also work in central government so can fully imagine when the project or scheme was implemented that calculations should be after tax, was either missed or just not finished off.

Anyone seen any further information over their time? Anyone switched to having payments taken from their employer, how did the difference work out?

1 Reply
Posts: 5458
(@dadmod2)
Illustrious Member
Joined: 6 years ago

hi, if you run some Google searches, little explanation:.

  • The CMS relies on information from tax returns to determine a paying parent's income, hence the switch to using gross weekly income (before deductions). 

     
  • Why Gross Income?
    Using gross income ensures that the CMS has access to a more comprehensive picture of a parent's financial situation, potentially catching those who might not declare income accurately to HMRC.
     

but there is still a scenario where income is based on net pay: self employed people/company directors.

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