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I own and run 2 x Limited companies.
I've had a a good 20/21, and next week I will declare a one off £90k dividend on top of my annual £70k salary. My current CMS payments are calculated based on my £70k salary.
I note at the bottom of page 40 in this <a href=" removed link " target="true">CMS guidance document it says: "Important: you do not have to tell us about this if your child maintenance payments are based on a gross income figure given to HM Revenue & Customs by you, your employer or your accountant – although you can if you want to)
Given the above statement in the guidance, do I need to contact CMS to advise them of this?
If I do proactively advise CMS - I suspect they will increase the amount I pay to the mother of my child to the maximum monthly figure (circa £900). However, if I'm 2 - 3 months in to the new financial year (21/22) and it looks like my total income will be only my £70k salary and no dividend payment, can I contact them to ask for another variation order to bring my monthly payments back down?
Thanks all
hi,
as your limited then they will just check your year end tax info, at the annual review. Seems they only see the salary figure, and then you can ring them and declare the dividend for last tax year if any.
Thanks Bill...
I am still keen to understand:
1) Is it a rule that I must proactively tell CMS or not. Per their own they state I do not have to tell them if my payments are based on a gross income that my accountant provides to HMRC
2) If I do tell CMS and they adjust my monthly payments, will I have the opportunity to reduce those payments again as the £90k dividend so technically my income has dropped by 25% again in the new financial year
Hi,
I had been a LTD company while dealing with CMS. they told me I don't need to tell them about any changes during the year. same as what it says in their booklet. They get info from HMRC or our accountant. They just want to know when my year end tax returns are done. They check it at annual review. If it's wrong I just ring and correct them. Once They did review, I said my income is 25% lower than previous years. They said that's not how they work it out. It gets confusing as there is difference with way they do things with LTD and perm employees. It's more difficult for them to deal with LTD income than perm workers.
you could contact them any time in the year if income changed by 25% and see what they say.
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