Advice for an Appeal against a failed CMS Mandatory Reconsideration Notice

I thought CMS based it on the figures that are provided to them by HMRC?

Hi Mike, they say they do, but it seems there was a mistake in the P60 figure they used at my annual review (in March), so used an old figure. They then did a re-calculation (I don't know why) in June and used two high payslips from the previous year to re-calculate the whole year. That figure they've used is about 34% above my actual gross this year... Hence my mandatory reconsideration...

Hi

Was the 2 month average 34% higher than the yearly earnings? If so then it makes sense as you would have had to declare the increased earnings at the time as they were greater than 25% of your usual salary. If not then their approach is unusual.

However if those 2 months are now 34% higher than this years salary, then as soon as you have 2 months payslips demonstrating this you should be able to notify them of a reduction in earnings (change in salary greater than 25%) and they would recalculate anyway. If you are on the borderline then consider increasing pension payments to generate a greater than 25% drop for 2 months and trigger a review... 

@Daddyup

Thanks, for your reply, that cherrypicked 2 month average was 34% above , but then they've applied that backdated to March last year, giving me now thousands in arrears. Which I'm not sure would be removed if I did >25% variance for 2 months now....

So, I don't know what tactic to take really, possibly 1. DO the appeal to hopefully remove the arrears and get a new more realistic assessment and 2. do the review to get it down further.

Would be very interesting to know what are peoples experience of the appeal process?

Posted by: @Daddyup

Hi

Was the 2 month average 34% higher than the yearly earnings? If so then it makes sense as you would have had to declare the increased earnings at the time as they were greater than 25% of your usual salary. If not then their approach is unusual.

However if those 2 months are now 34% higher than this years salary, then as soon as you have 2 months payslips demonstrating this you should be able to notify them of a reduction in earnings (change in salary greater than 25%) and they would recalculate anyway. If you are on the borderline then consider increasing pension payments to generate a greater than 25% drop for 2 months and trigger a review... 

 

 

Hi @Daddyup, the two month average you state, is that what they use? I can't find any reference to a two months average in the CMS publications....

hi, as far as I know, they should not be cherry-picking your tax records, and should be using your most recent tax return from HMRC. you can try this organisation for help: 

https://www.nacsa.co.uk/

Hi

When my CMS claim was first set up, they waited for the 1st 2 payslips and worked out an average to confirm my annual earnings. As my start date was 1st of the month and my salary each month is just 1/12th with no overtime or bonus then it all worked out.

There is no reference to the 2 months payslip use but logically it is the best way they can check your salary at any given time (accounts for overtime/bonus in arrears etc) 

Although Bill is right in saying they should use your most recent tax return, unfortunately it appears they may believe that you did not declare a change in income greater than 25% in which case all the usual rules go out the window.. As if your income on average during those 2 months was 34% greater than your annual income you are trying to declare (or worse did declare last year) then at some point it must have been significantly above the 25% at which point you are legally required to notify them of a change in income. In addition when the incorrect P60 figure was used, did you bring this to their attention straight away or was it something that they picked up?

It's very complex and I would go on to appeal further and breakdown your salary by week/month/year for the periods you are appealing and work out how much you should have paid v how much they are asking you to pay and present that.. (I would do it weekly as that is how they work it out).. 

I'm in a similar position. I've recently changed employment status (Self Employed to PAYE) as of beginning of July. My annual review is next month and they will report their usual calculations based on HMRC's figures. However, my salary has changed quite significantly (way more than +25% of last years gross earnings), so I will be obligated to disclose this to them.

However, based on the wording they have on their website (see below), my interpretation is that you only report this once you have officially crossed the 25% increased amount and not before. So, from my perspective, I will not cross the increased 25% mark until I have completed at least 3 months of employment, which works out around October time (started in July and paid monthly).

"You can only report a change of income that has already happened. If income is changing in the future,
complete this report after the effective date. We review Child Maintenance each year, on the anniversary of the date we were first told about the application for child maintenance. If the income has changed by less than 25%, we will take this into consideration at the time of your Annual
Review"

My question is, based on the original posters scenario, is it likely they will calculate the new payments from October based on my new salary and the 25% increased amount, or will they add on arrears from July? Technically speaking they should be from October as I had not crossed the threshold before then.

I did raise a query with them via the online portal and they wrote back saying that I should report this once I have crossed the +25% increase in earnings for a recalculation by reporting a change on your "my child maintenance case account".

Hi

They have access to your live pay info that your employer submits to HMRC each month so they will see when the increase happens and work it out from then which should tie in with when you have to report it.. 

My understanding was that they got this data directly from HMRC themselves and based their annual assessments based on any changes in this figure. Obviously, there is a caveat to this in that the parent should advise them as and when the circumstances change, i.e. +/- 25% of previous earnings.

I suspect the CMS do not have the manpower to be monitoring changes in "live pay" and then communicate this to you. Hence why there is an obligation on the parent to report, which is then backed up by the threat of a £1k fine if you don't advise them of said changes. 

Same thing has happened to me, my annual review has taken place yet they have used figures from two years ago. Even though I supplied 2 pay slips, plus end of year HMRC figure, When they first approached me I estimated that I would gross 36k, but March this year is was actually 34k, now they have increased my payments to 400 per month. Yet I'm reducing my hours (I'm 60) and have informed them I will gross 30,722. I put in the Mandatory reconsideration notice and they rejected. CMS is a joke, my ex gets 400 now, plus 102 Child allowance. I had an agreement with a solicitor at 358 per month, but since CSA have got involved, it's all broken down. at my wits end.