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Hi I'm new here, ans hoping to get some advice and help,
I'm paying CMS at the moment paying monthly
I'm due to have a negligence payout, would I need to notify CMS and will I have to pay a % as a one off or would this change the monthly payment ?
hi, how much will this payout be? if it's taxable income, then CMS would be interested. if it increases your income by 25% or more you should let them know, and they can decide if they want to recalculate maintenance.
@dadmod2 I'm not sure how much it will be
But it will be tax free as its a negligence payout
Hello,
There is a few factors to consider. Just because a lump sum of money is tax free, do not automataclly mean a tax return does not have to be filed some where with in the process. So that some thing to look into.
This comes under Variations of income or none earned income. As covered by the child maintance caculation regulations 69A for example. The Child Manitance and other payments act ect.
It may not be classed as income from self employment or PAYE. May not to taken into account at Annual Reveiw as income. But may be subject to a variation of income, 'where the ex submits a request to have something included in the caculation'. To get her cut ** ops.... er hum.. to get the childs share.
Now I'll be honest I do not know if a negligance payment comes under the exclusions list 69A paragraph 4.
But worst case, if it is over the perscribed values. Over £2,500 on say renting a room unearned income or £31,250 as an asset (Not including your primary residance). and the CMS accept the variation. They assumed value (Or cash sum) is earning 8% annually. This 8% would then be added to your annual income figure for the purpose of a caculation.
As an exsample:
£80,000 / 100 * 8 = £6,400.00 That would be added to a persons yearly Gross income figure. Then the Maintence caculation.
So say they earn £28,000 per year. £28,000 + £6,400 = £34,400 per year. / 365 * 7 = £659.73 Weekly Gross. Basic rate 1 child 16% Maintance of £105.56. (Compared to £85.92 maintance normally).
There is loads of stuff to read on this subject. However if your not sure, 'take soild legal or finantial advice!! If the sum is large to you do this any way'
I hope it helps a little.
Good luck.
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