Hello
I have a question around tax on maintenance payments.
I’m aware that the recipient receives payment tax free, however does the payer get hit with double tax before it’s sent to CMS?
example
tax is applied on gross calculated maintenance payment.
payer not only gets hit with HMRC tax on full maintenance amount but then has to send the full gross calculated amount through from net wages?
so basically the payer is paying double tax before it’s sent to recipient ?
is this correct?
Thanks
Hi,
CMS calculate payments based on your gross income. There is no double tax.
With CMS the only tax would be if you miss payments or refuse to pay, then they apply penalty fees where they charge you an extra 20% fee on top of your payments. But if your compliant then this does not happen.
Please see this, explains all their rules and processes: