Child Maintenance UK provides unofficial advice on child support for seperated parents, who are paying child maintenance, or receiving child maintenance through a child support arrangement, managed by the Child Maintenance Service.
Hey everyone, this is your chance to make a massive difference in the child maintenance system, whether you're a paying parent or receiving parent. The government is currently running a consultation about child maintenance, specifically how payments are collected. One proposal suggests that everyone be put on collect and pay—yes, everyone. This could mean every parent paying 2%. As the Child Maintenance Service is a government department, that 2% will eventually go back to the government to pay for other things, not child related.
Key Points:
Collect and Pay for All: Even if you’re paying on time or have no issues receiving payments, you might still be put on collect and pay.
Charges Involved: Both paying and receiving parents will be charged 2% of their income, impacting nearly 1 million child maintenance cases.
Child Maintenance Focus: This change aims to recoup some costs and modify how the Child Maintenance Service (CMS) operates, which may or may not be beneficial.
Your Opinion Matters: Whether you agree or disagree with these changes, it’s crucial to participate in the consultation. Your input can shape the future of child maintenance.
How to Participate:
Fill Out the Survey: The link to the questionnaire is in the description. Provide your feedback to influence the outcome.
Stay Updated: If the survey has closed, check the same link for other petitions and future consultations on child maintenance and benefits.
Why It Matters:
Impact on Finances: The 2% charge could significantly affect both paying and receiving parents.
Voice Your Opinion: If you don’t participate, you can’t influence the decision.
Future Changes: Your feedback today will shape child maintenance for the future.
Call to Action:
Click the link in the description to access the questionnaire.
Fill out your answers and share your thoughts.
Stay informed about future consultations and petitions.
Additional Content:
If you found the video above helpful, check out my other videos on child maintenance and related topics.
Keywords and Hashtags:
Keywords: Child Maintenance, CMS Consultation, Government Policy, Collect and Pay, Child Support, Parental Support, Financial Impact, Government Consultation
Hello, hope you're well. Today, I’m addressing a common question: What happens to your Child Maintenance Service (CMS) payments when your child comes to live with you?
Key Points Discussed:
Becoming the Main Carer:
If a child comes to live with you for four nights a week or more, you become the main carer. However, CMS won't automatically update your case—you need to take action.
Applying for Child Benefit:
Apply to HMRC for child benefit. Once approved, you can apply to CMS to start receiving maintenance from the other parent.
CMS Payment Adjustments:
Example: Earning £50,000/year with two children typically means you pay 16% (~£8,000) in child maintenance. If one child moves in with you and you don't update CMS, your payment might drop to 12%.
By claiming child benefit and applying for CMS, you could receive 12% from the other parent, balancing the financial responsibility more fairly.
Shared Care:
If a child stays with you two nights a week, you get a reduction of about 1/7th in your maintenance payments.
For four nights a week, you should file a claim with CMS to start receiving payments from the other parent.
Navigating Court Orders:
CMS should follow court orders. However, if the actual living situation differs from the order, you might need to address this with CMS or through legal channels.
Alternative Options:
If you face challenges with child benefit claims, a DNA test might help, especially if the child is over 16 and doesn't comply. However, this is risky and could cost you £250.
Recap:
Apply for child benefit if the child lives with you permanently.
File a new CMS claim once you become the primary carer.
Understand shared care reductions and how they affect payments.
Be aware of court orders and alternative options like DNA tests.
I hope this information is helpful! Please like and subscribe to stay updated on more topics related to CMS. If you have questions or specific topics you want me to cover, comment below—I’ll respond as soon as I can.
Title: Understanding Child Maintenance: Payments, Arrears, and CMS Policies Explained
Description:
Hello everyone, hope you're well! In today’s video, we dive deep into the world of child maintenance. This video covers a variety of crucial topics including DEOs (Deduction from Earnings Orders), spreading arrears, child benefit, and more. Whether you’re a paying or receiving parent, this video is packed with information to help you navigate the child maintenance system effectively.
Key Points Covered:
Introduction to Child Maintenance:
Overview of the Child Maintenance Service (CMS)
Personal experience with CMS call handling
Understanding Payments and Arrears:
Recent changes in payment calculations
CMS policy on spreading arrears over two years
Real-life scenarios and their financial impacts
Managing Arrears:
How to negotiate and adjust arrears repayment with CMS
Importance of proactive communication with CMS
Missed Payments Procedures:
Updated CMS policies on missed payments
Consequences of missing a payment and the transition to Collect and Pay
Importance of timely reporting and evidence submission
DEO (Deduction from Earnings Order) Process:
How DEOs are triggered and managed
Steps to request removal from a DEO and transition to Direct Debit
Child Benefit and Education Status:
Procedures for reporting a child leaving education
Impact on child maintenance calculations and case closure
Communication with CMS:
Effective use of the CMS portal for reporting and requests
Handling delays and ensuring compliance
Additional Insights:
Collect and Pay refunds
Bank details and non-compliance issues
Text message notifications from CMS
If you found this video helpful, please like, share, and subscribe for more detailed guides on child maintenance and related topics. Feel free to leave your questions in the comments below, and I’ll do my best to answer them.
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Director's Loans: A Comprehensive Guide on How Treated and Child Maintenance Impact
1. Overview
A director’s loan is when you (or other close family members) get money from your company that is not:
- A salary, a dividend, or an expense repayment
- Money you’ve previously paid into or loaned to the company
A director taking a loan could incur a Child Maintenance penalty. THey are not a way to avoid child maintenance.
**Records You Must Keep**
You must keep a record of any money you borrow from or pay into the company. This record is usually known as a ‘director’s loan account’ or DLA.
**At the End of Your Company’s Financial Year**
Include any money you owe the company or the company owes you on the ‘balance sheet’ in your annual accounts.
**Tax on Loans**
You may have to pay tax on director’s loans, which will impact on your self assessed tax bill. It will also incur additional liability for child maintenance paid via a Child maintenance Service arrangement. Your company may also have to pay tax if you’re a shareholder (sometimes called a ‘participator’) as well as a director.
Your personal and company tax responsibilities depend on whether the director’s loan account is:
- Overdrawn - you owe the company
- In credit - the company owes you
2. If You Owe Your Company Money
You or your company may have to pay tax if you take a director’s loan. Your personal and company tax responsibilities depend on how the loan is settled. You also need to check if you have extra tax responsibilities if:
- The loan was more than £10,000 (£5,000 in 2013 to 2014)
- You paid your company interest on the loan below the official rate
#### Your Company’s Responsibilities if You’re a Shareholder and Director
They are complicated and easy to get wrong.
- **If You Repay the Loan within 9 Months of the End of Your Corporation Tax Accounting Period**
- Use form CT600A when you prepare your Company Tax Return to show the amount owed at the end of the accounting period.
- If the loan was more than £5,000 (and you took another loan of £5,000 or more up to 30 days before or after you repaid it), pay Corporation Tax at 33.75% of the original loan, or 32.5% if the loan was made before 6 April 2022. After you permanently repay the original loan, you can reclaim the Corporation Tax - but not interest.
- If the loan was more than £15,000 (and you arranged another loan when you repaid it), pay Corporation Tax at 33.75% of the original loan, or 32.5% if the loan was made before 6 April 2022. After you permanently repay the original loan, you can reclaim the Corporation Tax - but not interest.
- **If You Do Not Repay the Loan within 9 Months of the End of Your Corporation Tax Accounting Period**
- Use form CT600A when you prepare your Company Tax Return to show the amount owed at the end of the accounting period.
- Pay Corporation Tax at 33.75% of the outstanding amount, or 32.5% if the loan was made before 6 April 2022. Interest on this Corporation Tax will be added until the Corporation Tax is paid or the loan is repaid. You can reclaim the Corporation Tax - but not interest.
- **If the Loan is ‘Written Off’ or ‘Released’ (Not Repaid), Including if the Company Goes into Liquidation**
- Deduct Class 1 National Insurance through the company’s payroll.
- Pay Income Tax on the loan through a Self Assessment tax return. This may impact Child Maintenance
If the Loan was More Than £10,000 (£5,000 in 2013-14)
If you’re a shareholder and director and you owe your company more than £10,000 (£5,000 in 2013 to 2014) at any time in the year, your company must:
- Treat the loan as a ‘benefit in kind’
- Deduct Class 1 National Insurance
You must report the loan on a personal Self Assessment tax return. You may have to pay tax on the loan at the official rate of interest.
If You Paid Interest Below the Official Rate
If you’re a shareholder and director, your company must:
- Record interest you pay below the official rate as company income
- Treat the discounted interest as a ‘benefit in kind’
You must report the interest on a personal Self Assessment tax return. You may have to pay tax on the difference between the official rate and the rate you paid.
Reclaim Corporation Tax
Your company can reclaim the Corporation Tax it pays on a director’s loan that’s been repaid, written off, or released. You cannot reclaim any interest paid on the Corporation Tax.
**Claim After the Relief is Due**
This is 9 months and 1 day after the end of the Corporation Tax accounting period when the loan was repaid, written off, or released. You will not be repaid before this. You must claim within 4 years (or 6 years if the loan was repaid on or before 31 March 2010).
**Reclaiming Within 2 Years**
If you’re reclaiming within 2 years of the end of the accounting period when the loan was taken out, use form CT600A to claim when you prepare a Company Tax Return for that accounting period or amend it online.
Use form L2P with your Company Tax Return instead if either:
- Your tax return is for a different accounting period than the one when the loan was taken out
- You’re amending your tax return in writing
Tell HMRC how you want the repayment in your Company Tax Return.
**Reclaiming After 2 Years**
If you’re reclaiming 2 years or more after the end of the accounting period when the loan was taken out, fill in form L2P and either include it with your latest Company Tax Return or post it separately.
HMRC will repay your company in due course.
3. If You Lend Your Company Money
Your company does not pay Corporation Tax on money you lend it.
If You Charge Interest
Interest you charge your company on a loan counts as both:
- A business expense for your company
- Personal income for you
You must report the income on a personal Self Assessment tax return.
Your company must:
- Pay you the interest less Income Tax at the basic rate of 20%
- Report and pay the Income Tax every quarter using form CT61
You can request form CT61 online or call HM Revenue and Customs at:
Briefing Note: Child Maintenance Service (CMS) Statistics for Great Britain (January 2015 - March 2024) Summarised.
Overview
This is a summary of the latest statistics on the Child Maintenance Service (CMS) for Great Britain, covering January 2015 to March 2024. It includes minor revisions to previously published data.
1. Main Stories
Quarter to March 2024 Highlights:
New Applications: CMS received 36,000 new applications, a 3,200 increase from the same quarter last year.
Children Covered: 990,000 children were covered by CMS arrangements, up by 22,000 since December 2023.
Collect and Pay Compliance: 69% of Paying Parents using Collect and Pay paid some maintenance, up 4 percentage points from March 2023.
23% paid up to 90% of the maintenance due.
46% paid over 90% of the maintenance due.
2. Key Information
Child Maintenance:
Financial support provided by the non-custodial parent (Paying Parent) to the custodial parent (Receiving Parent).
Two service levels offered by CMS:
Direct Pay: Parents handle payments themselves.
Collect and Pay: CMS manages the payments, charges fees to parents to Collect Monies.
3. Applications to CMS
Year to March 2024: 130,000 new applications, a 5% increase from the previous year.
Quarter Ending March 2024: 36,000 new applications.
End of March 2024: CMS managed 720,000 arrangements for 660,000 Paying Parents, a 10% increase from March 2023.
4. Case Composition
Overall Increase: 17,000 new arrangements since December 2023.
Service Distribution:
61% Direct Pay.
37% Collect and Pay.
Switching Services: 11,000 parents moved from Direct Pay to Collect and Pay.
Unassigned Arrangements: Increased from 15,000 to 16,000, accounting for 2% of all arrangements.
5. Children Covered
Quarter Ending March 2024: 990,000 children covered, up by 22,000 from December 2023.
Service Distribution:
620,000 children under 440,000 Direct Pay arrangements.
350,000 children under 270,000 Collect and Pay arrangements.
21,000 children not yet assigned to a service.
6. Paying Parents and Collect and Pay Service
Compliance Definition: Any money paid towards due child maintenance.
Quarter Ending March 2024:
190,000 Paying Parents were due to pay via Collect and Pay.
58,000 (31%) paid no maintenance.
130,000 (69%) paid some maintenance:
44,000 (23%) paid up to 90% of the maintenance due.
87,000 (46%) paid over 90% of the maintenance due.
7. Paying Parents Characteristics
Quarter Ending March 2024:
93% of Paying Parents were male.
73% aged between 30 and 49.
55% had 1 qualifying child.
81% with 2+ children had 1 arrangement; 19% had 2+ arrangements.
8. Child Maintenance Due and Paid
Quarter Ending March 2024:
£348.9 million in child maintenance was due.
£266.7 million arranged through Direct Pay.
£82.2 million through Collect and Pay (£58.7 million paid; £23.5 million unpaid).
9. Enforcement
Methods:
Deduction from earnings or benefits.
Direct bank deductions.
Court actions.
Quarter Ending March 2024:
27% had earnings orders.
38% due via benefits.
35% via other payment methods.
Liability Orders:
6,200 liability orders in process.
4,700 deduction orders.
5,200 enforcement agent referrals.
£5 million collected from sanctions.
10. About These Statistics
Status: From September 2023, these statistics are classified as Official Statistics.
Background: CMS replaced the Child Support Agency (CSA) in December 2012. Parents must use the Get Help Arranging Child Maintenance (GHACM) service before applying to CMS.
Enforcement: Methods include deduction from earnings/benefits, bank deductions, and court actions.