How to Report Child Benefit Fraud

How To Report Child Benefit Fraud: A Comprehensive Guide

Introduction

Child Benefit fraud is a serious issue in the UK, with some parents manipulating the system to also receive more money from the Child Maintenance Service (CMS). This guide explains how to report Child Benefit fraud, provides key legal information, and includes real-life case examples to illustrate the impact of fraud.

Understanding Child Benefit and CMS

The Child Maintenance Service (CMS) ensures that child support payments continue as long as the child is in education up to Level 3 (equivalent to A levels). The CMS heavily relies on Child Benefit records to determine whether a child is still in education.

To qualify, the education must be a recognized qualification—it cannot be work experience, a weekend course, or a paid apprenticeship.

However, some parents exploit this system by failing to cancel Child Benefit when their child leaves education early. This means they continue to receive both Child Benefit and child maintenance payments unfairly. Since the CMS does not verify educational status directly with colleges, incorrect Child Benefit records can lead to wrongful CMS charges.

This is not a victimless crime—it has a financial impact on the paying parent.

Key Dates for Child Benefit Termination

When a child leaves education, Child Benefit payments usually stop at the next terminal date:

• End of February
• End of May
• End of August
• End of November

For example:

• If a child leaves college in December, Child Benefit continues until the end of February.
• If a child finishes a two-year college course in June, Child Benefit stops on 31st August.
• If a child is on a paid apprenticeship, they do not qualify for CMS or Child Benefit.

How to Report Child Benefit Fraud

If you suspect Child Benefit fraud, you can report it in the following ways:

1. Online Reporting

Use the HMRC online fraud reporting tool:

Report Child Benefit fraud here

2. Telephone Reporting

Call the HMRC Fraud Hotline at 0800 788 887. This is a confidential service where you can report suspected fraud.

3. Report by Post

Send a written report to:

HM Revenue and Customs - Child Benefit Office

PO Box 1

Newcastle Upon Tyne

NE88 1AA

United Kingdom

Case Examples

Case 1: CMS Overpayment Due to Fraudulent Child Benefit Claim

John had been paying child maintenance for his 18-year-old son, whom he believed was still in college. However, through contacts at the school, he discovered that his son had dropped out six months earlier. The receiving parent failed to cancel Child Benefit, leading to continued CMS payments.

John reported the suspected fraud to HMRC and provided supporting evidence. HMRC investigated, found the claim fraudulent, and ordered repayment of wrongly claimed Child Benefit. CMS then closed his case and refunded overpaid maintenance.

Case 2: Child Left Education, but Child Benefit Continued

Sarah's daughter left education in December, but the receiving parent continued to claim Child Benefit until August. Sarah reported the fraud to HMRC, who confirmed the ineligibility of payments. The receiving parent was required to repay the overclaimed Child Benefit, and Sarah's CMS payments stopped sooner than initially expected.

Frequently Asked Questions (FAQ)

Q: Will the Child Maintenance Service tell me when my child leaves college?

A: No, CMS will only inform you that the case is closed when Child Benefit stops. CMS does not have direct access to college attendance records.

Q: My child finished school in June—why is my CMS still being deducted?

A: Child Benefit usually ends on August 31st. If your child left in June, the receiving parent is entitled to Child Benefit until August, which keeps CMS active until then.

Q: The CMS case has closed, but I still have payments on my schedule. Why?

A: This likely means you are paying in arrears. CMS calculates arrears separately and will continue to collect them even after the case is closed.

Additional Resources

• Report Benefit Fraud: HMRC Benefit Fraud Reporting
• Child Maintenance Information: CMS Website
• Appeal CMS Decisions: Challenge CMS Calculations

Conclusion

Child Benefit fraud is a serious issue that directly impacts paying parents by wrongfully extending CMS payments. Reporting fraudulent claims can prevent financial losses and hold the responsible party accountable. If you suspect fraud, report it immediately via phone, online form, or post.

Persistence and knowledge of the system can help stop fraudulent claims and ensure fair payments.

This video explains further:

Conclusion: Reporting Child Benefit fraud is essential to ensure fairness and integrity in the system. By understanding how the CMS and Child Benefit records work, and knowing the correct channels to report fraud, you can help prevent unjust payments and support the proper use of public funds.

Once the case is closed, even after a refund, you may still owe some arrears.

Keywords:

Further Reading

Child benefit entitlement can be clarified by checking the Child Benefit Technical Manual

Child Benefit Guide

Child Maintenance Guide

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Do You Have to Tell the Child Maintenance Service (CMS) About Changes in Your Job or Address?

 

🔍 Do You Have to Tell the Child Maintenance Service (CMS) About Changes in Your Job or Address?

When you're paying or receiving child maintenance through the Child Maintenance Service (CMS), you're not just dealing with informal arrangements—you’re dealing with a legal system backed by legislation. One of the key obligations placed on parents involved with CMS is to notify them about any changes in employment or address. But what law actually says you have to do that?

Let’s break it down.

⚖️ What Law Requires You to Notify the CMS?

This obligation is rooted in a combination of primary legislation (an Act of Parliament) and secondary legislation (Statutory Instruments, or SIs). Here's what applies:

📜 The Child Support Act 1991

This is the main piece of legislation that governs child maintenance in the UK.

• Section 14(1) states that any person involved in a child support case must provide information as required by the Secretary of State (i.e., the government via CMS).
• Section 14A gives legal power for regulations to be created which require parents to notify the CMS of changes in their circumstances.

So, this is the foundation of the obligation. But the specific rules are set out in the regulations below.

🧾 The Child Support (Information, Evidence and Disclosure) Regulations 2008 – SI 2008/2551

This Statutory Instrument provides the detailed legal framework. The most relevant part is:

👉 Regulation 15 – Duty to Notify Changes

This regulation makes it crystal clear:

A non-resident parent (i.e., the paying parent) must notify the CMS within 7 days of any change in:

• Address
• Employment (including employer’s name and address)
• Income, hours worked, or employment status

If you don’t tell them, you’re in breach of your legal duty.

⚠️ What Happens If You Don’t Comply?

There are consequences. The CMS can take enforcement action if you fail to notify them of a change that affects your child maintenance calculation.

This could include:

• Backdated maintenance recalculations
• Legal proceedings in cases of deliberate non-compliance

Under Section 14(1A) of the Child Support Act 1991, giving false information or failing to provide information when requested can also be treated as a criminal offence.

📝 Final Thoughts

If your circumstances change—whether you move house, start a new job, or lose a source of income—it’s not just a courtesy to tell CMS. It’s a legal requirement.

Ignoring this duty can result in serious consequences, including penalties and potential prosecution. So if you’re involved with CMS, make sure you keep them in the loop. It’s not just good practice—it’s the law.  We recommend that you notify all changes using the portal.

📚 Legal References

• Child Support Act 1991 – Sections 14 & 14A
• Child Support (Information, Evidence and Disclosure) Regulations 2008 – Regulation 15
  
  
  

Child Maintenance Service self-employed or limited company

How to Obtain Child Maintenance via the Child Maintenance Service for a Self-Employed or Limited Company Paying Parent

1. Understanding the Child Maintenance Service (CMS)

The Child Maintenance Service (CMS) is the UK government department responsible for ensuring that non-resident parents contribute financially to their children’s upbringing. However, when the paying parent is self-employed or owns a limited company, calculating and enforcing payments can be more complex.

2. Initiating a Child Maintenance Claim

• Contact CMS: Apply online, by phone, or request a paper application.

• Provide Necessary Details: You will need details of the paying parent's income, employment status, and company details (if applicable).

• CMS Fees: There is no longer an application fee to use the Child Maintenance Service

The CMS will then produce a calculation based on the last available tax year released to them by HMRC.  This wont be the current tax year, and most possibly not the last one.

3. Assessing Income When the Paying Parent is Self-Employed

Unlike salaried employees whose earnings are easy to verify via PAYE records, self-employed individuals have more control over how they report income.  Remember

• CMS primarily relies on HMRC tax records.

• They use the most recent available tax return (Self Assessment) to determine gross income.

• If income fluctuates, CMS can take an average over multiple years.
  
  Its important to realise hearsay is not evidence.  Driving flashy cars, big houses etc do not determine the CM payment.  Its the taxable income, taken from HMRC records that counts.

4. Challenges with Self-Employed Paying Parents

• Underreported Income: Some self-employed individuals minimize declared income through tax deductions.  And some dont declare the money as they receive it in cash, then it will never be recorded.
  
  Irregular Income: Seasonal fluctuations or business expenses can affect reported income.

• Delays in Tax Filings: If the latest tax return isn't available, CMS may use an older one.

5. Assessing Income When the Paying Parent Owns a Limited Company

If the paying parent is a director or shareholder in a limited company the CMS will initiallly produce a calculation based solely on their salary which is reported to HMRC.  CMS dont take their word for it, they get the information from HMRC

Dividends

CMS can also consider dividends drawn from the company.  The paying parent will need to be a shareholder of the company.  Being just a director, does not mean they have shares.  Only a shareholder can be paid dividends.

As CMS use HMRC data, after the initial calculation is produced, the receiving parent has to go to the CMS and ask for the dividends to be taken into account.  They wont be taken into account automatically, so its possible for a shareholder to receive dividends for years and not have to pay CM money on that income.

This is perfectly legal and normal.  Dividends are only included if asked for.  If you are a receiving parent and you want the dividends to be included you must ask for a variation due to dividends.  CMS can refuse if it is a speculative application.  It must be a credible ask.  So for example the receiving parent should state they know the paying parent receives dividends as they have told them, or they know the accounts because they used to do the accounts.

If you are a paying parent, and the dividend variation is made, they will just get the information from HMRC.  You dont need to submit evidence.  CMS will write to you.  Its important to point out, this is just a procedure.  If you are a paying parent you dont have to declare your dividends, and you wont get into trouble when this process is started.  The inclusion of dividends is only valid for the tax year used, and going forwards.  You will not have to pay for dividends from previous tax years.

If the paying parent is self employed, then asking for dividends is not credible, because the self employed work for themselves and they dont earn dividends.  Only a shareholder in a company can receive dividends.

So if the receiving parent asks for dividends due to the paying parent being self emplyed the application will be refused

Pension Contributions Paid By the Company Direct to The Pension Company

Companies can pay pension contributions direct to a pension scheme.  Again this is legal, but the CMS may consider it to be a Diversion of Income if the Contributions are excessive.

So if the paying parent is paid £12,000 per year, and then receives £12,000 in direct pension contributiosn that would be seen as excessive.

CMS would take a position on that, meaning that the CMS may be adjusted upwards.

Excessive Retained Profits

Whilst it is ok to retain profits, if it is being seen to be excessive, and the paying parent is a sole director it may be viewed as diversion.

Have a plan.  If you need to retain profit for a big investment, document the process.  There was a tribunal case where CMS lost because they said that a new vehicle fleet was only purchased to avoid CMS.   

Directors Loans

Directors may receive loans, and not repay them to the company.  That is legal, but if the loan is not paid off it becomes taxable.

As this point it then becomes subject to CMS.  CMS will value the entire loan as income and charge CMS on it.

Remember 

• CMS can request company accounts to identify additional income sources.

• If necessary, CMS can apply a "variation" to include additional income streams (e.g., retained profits, benefits in kind).

6. Requesting a Variation for Hidden or Misreported Income

If you suspect that the paying parent is underreporting their income, you can request a variation:

• Undeclared Dividends: If they pay themselves via dividends but report a low salary.  Remember, this is not illegal and is best practive to reduce tax.  But a low salary does not mean that someone is dodging CMS.  

• Retained Profits: If their company holds profits instead of distributing them.

• Lifestyle Inconsistencies: If they live beyond their reported means (e.g., luxury assets, holidays).

To request a variation:

• Provide CMS with evidence (e.g., company accounts, bank statements, property ownership records).  Some of this may be obtained from companies house.  
  
  Remember any document sent to CMS must be legally obtained.  If not it cannot be used by CMS to conduct assessments.
  
  A common mistake is to use Form E paperwork from a divorce settlement.  If permission has not been sought from the court, and an order granted, it is illegal to use the information for CMS purposes and the user can be found guilty of contempt of court.

• CMS may contact HMRC or investigate further.

7. Enforcement Actions if the Paying Parent Avoids Payment

If the paying parent fails to pay:

• Deduction from Earnings Order: For those who pay themselves via PAYE through their own company.

• Deduction from Bank Accounts: If money is held in personal or business accounts.

• Liability Order & Bailiffs: CMS can take court action to seize assets.

• Charging Order & Sale of Property: In extreme cases, CMS can force the sale of assets.

8. Seeking Additional Support

• Legal Advice: Consult a solicitor or family law specialist if you encounter resistance.

• Financial Investigation Unit (FIU): CMS has specialist teams to investigate complex financial arrangements.

• Parliamentary & Ombudsman Complaints: If CMS fails to act effectively, you can escalate your case.

Conclusion

While obtaining child maintenance from a self-employed or limited company paying parent can be more challenging, persistence and using all available CMS options can help ensure fair contributions. If necessary, seek professional advice to strengthen your case.

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