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Hi All
What a fantastic information resource this place is!
Im wondering if anyone can help me understand the pros and cons of being self employed with a one person limited business vs being employed with regard to the calculation of maintenance payments.
I have been employed for thirty years and paying maintenance calculated through the CSA for the last 5 years. Im pleased to say that my ex wife and children are financially very secure as at the time of the divorce she retained the marital home and i retained our joint debt of circa 40k.
I have been renting since the divorce and with my high outgoings due to existing debt repayments I am now sinking further into debt.
My ex wife has zero compassion and therefore interest in discussing any mutually agreed reduction in my monthly payments even though she now lives with a highly paid partner.
So i am now seriously considering the option of becoming self employed if this gives me some flexibility on the level of maintenance i need to pay....e.g the amount of money declared as salary vs revenue, profit and dividends.
To be clear i am not interested in shirking my responsibilities. i am simply looking for a way to manage and protect a higher % of my income in order that I can continue to rent my flat and spend some money on my children when i see them every alternate weekend.
Any help of guidance would be much appreciated.
Steve
If you are still under the CSA (ie not shifted to CMS), then your ex might be able to go for a variation on the basis of diversion of income. I'm not sure if that is still available under CMS. Beyond that, you might be best speaking to an accountant as to what options are available to you if you become self employed.
If you are still under the CSA (ie not shifted to CMS), then your ex might be able to go for a variation on the basis of diversion of income. I'm not sure if that is still available under CMS. Beyond that, you might be best speaking to an accountant as to what options are available to you if you become self employed.
Thanks for the quick response. Will an Accountant be purely transactional in their approach? I'm wondering if I also need to speak with a Financial Advisor?
Any views or recommendations re Accountants or Financial Advisors would be much appreciated
To be honest, I really don't know enough about self employed income and the CMS, so any advice I give on this would not be reliable. It would be worth having a word with your accountant to see if they have experience with the CSA/CMS as that would be much better advice than I can give on the specifics.
Hi There,
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A lot of accountants are now well informed where CSA and CMS are involved and can help you with any forms you need, as far as I am aware if you are a limited company then you would pay yourself a wage and then pay CMS/CSA based on that wage, plus any dividens you pay yourself, if you keep all the money in business and just pay yourself a wage you can live on, then as far as I am aware they can't claim against it but I could be wrong.
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If you weren't limited company then they take the calculation from the amount of profit the business makes this is taken from your accounts.
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I think as actd has said have a chat with an accountant and see what they suggest, you would be best having one on hand anyway if you went self employed as they will save you more than they cost when they submit the tax return, they will claim money back against your tax for things you wouldn't even think of, plus my view is if you have an accountant doing your books and tax return you are much less likely to be looked at by HMRC.
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GTTS
Thanks very much for the advice
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