Child maintenance for self-employed parents: income and calculators

Self-employed parents can use the government’s child maintenance calculator for an estimate, but the CMS applies its statutory rules to the evidence. This guide concerns Great Britain; Northern Ireland has a separate service. See related guidance.

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In this article, we’ll take a look at:

• How child maintenance is calculated.
• How being self-employed affects child maintenance.
• How income evidence and changes affect a maintenance calculation
• Who decides on child maintenance payments.
• If child maintenance payments can be enforced.

Child maintenance depends on the child’s circumstances and the applicable rules. General rental-cost statistics after divorce do not determine a maintenance liability.

Keep accurate income records and obtain advice if you disagree with a calculation or cannot maintain payments.

Child maintenance calculator UK self-employed

The government calculator provides an estimate from the information entered. It does not confirm what the CMS will decide, and some complex circumstances need a separate assessment.

Or an estimate on how much you’ll receive if you’re not the paying parent. 

These online tools are helpful and in demand, just as this forum user shows:

Source: https://forums.moneysavingexpert.com/discussion/697829/child-support  

There are even child maintenance calculators for self-employed workers. The UK Government’s child support calculator can be used by self-employed workers too. 

How often are child maintenance payments reviewed?

CMS will automatically review your case each year.

Relevant changes can affect the calculation, but not every expense or short-term income fluctuation triggers a new amount. The CMS applies specific change and variation rules.

For example, if the child stays overnight with them more often. You should report a change as soon as it happens.

Child maintenance payments explained

Child maintenance, also called child support, is a regular payment from one parent to the other to finance the care of their joint children after a separation or divorce. 

CMS maintenance normally covers a qualifying child under 16, with provision for some children under 20 in qualifying education or training.

The extended rules concern approved non-advanced education or training. University education does not normally qualify for standard CMS maintenance; court orders or private arrangements can have different terms.

Both parents have responsibilities to support their child. The statutory payment arrangement depends on day-to-day care and other legal conditions.

The parent without the main day-to-day care is normally the paying parent. Nights alone do not decide every aspect of that assessment.

A weekday/weekend example cannot settle the result without considering the actual care arrangements and circumstances.

However, there are cases where the mother and father take care of the children for an equal or almost equal amount of time. 

Where day-to-day care is genuinely shared equally, there may be no CMS maintenance to pay. Receipt of Child Benefit is relevant evidence but does not automatically create liability in every equal-care case.

Shared overnight care can reduce a calculated liability under statutory bands. That is different from the assessment of genuinely equal day-to-day care.

How is child maintenance calculated if self-employed?

Self-employed parents use the same overall statutory framework, but the income evidence normally concerns taxable business profits and any other relevant income, rather than turnover.

The CMS normally starts from the latest available complete tax-year income supplied by HMRC. For self-employment, this is normally taxable profit, with relevant pension and other adjustments, converted to a weekly amount under the rules.

Gross business turnover is not the same as the income used for maintenance. Keep tax returns and accounts to support the figures.

Due to the fluctuating nature of income from self-employment, the figure might not be correct every week.

Historic HMRC income may differ from current income. A sustained current-income difference of at least 25% can be relevant under the rules; provide evidence and ask the CMS how it applies to your case.

If no previous tax return has been lodged because the paying parent only recently became self-employed, the paying parent may be able to prove their gross weekly income to the CMS.

If adequate income information is unavailable, the CMS may use a best-evidence assessment or a default maintenance decision. A new business does not automatically mean no liability.

What income is taken into account for child maintenance in the UK?

The calculation normally uses taxable gross income before Income Tax and National Insurance, with allowable pension and other adjustments. It is not simply the money paid into a bank account.

The CMS converts annual information into its statutory weekly calculation. Use the official calculator or decision rather than treating an informal division as exact in every case.

Employment, self-employment and pension income can be relevant. Additional unearned income, such as rent or dividends, or diverted income may need to be considered through a variation rather than being automatically included in every standard calculation.

A variation has specific legal categories and evidence requirements. Ask the CMS how to report income that you believe has been omitted.

» TAKE ACTION NOW: Get legal support from JustAnswer

Who decides child maintenance payments?

Child maintenance payments can be amicably agreed between the parents as part of their separation or divorce.

When parents decide on child maintenance independently, this is called a family-based arrangement.

But parents don’t have to use this method. They can instead enlist the help and support of the Child Maintenance Service (CMS).

The CMS can calculate how much child support should be paid and even help with the transactions if needed. 

The CMS looks at a variety of factors to decide how much child support should be paid.

Even if you’re going to use a family-based arrangement, it can be beneficial to speak with the CMS for guidance. 

Can child maintenance payments be enforced?

Yes, there are different ways to enforce child support payments. 

It’s hoped that you can agree child maintenance payments and those payments will be made without issue. But this isn’t always how things pan out. 

Sometimes, you might not trust that payments will be made or have already experienced delayed and missed payments. And you may therefore want to take pre-emptive or retrospective action. 

Some of the common solutions are:

1. Include child maintenance in a Consent Order as part of a divorce in England and Wales

2. The CMS Collect and Pay Service

The CMS has statutory collection and enforcement powers for arrears, including deductions and further enforcement steps where permitted. Report missed payments promptly; the process and available action depend on the case. See related guidance.

What is a Consent Order?

A Consent Order is a type of court order that couples can apply for if they have agreed on how matrimonial assets and finances will be divided as part of their divorce. 

A court-approved consent order can make an agreed financial settlement binding in England and Wales. It does not automatically cut every financial tie: a clean break requires the appropriate dismissal of claims, and maintenance or other obligations may continue.

The Consent Order can also include agreements about spousal maintenance payments and child maintenance payments.

A court order for child maintenance does not automatically expire after a year. Once it has been in force for a year, either parent can usually apply to the CMS if it has jurisdiction; an effective CMS calculation can replace the relevant court-maintenance provision. Different rules apply to some kinds of court maintenance.

A carefully drafted order and court approval are important. A solicitor is usually advisable, but professional charges and court-fee support are separate questions; check the current terms. See related guidance.

What is CMS Collect and Pay?

Another option and an option if you’re not getting divorced is the CMS Collect and Pay service. This is when CMS will take the money from one parent and give it to the other. 

Direct Pay is a statutory CMS calculation with payments made directly between the parents; it is not merely an informal private arrangement. The CMS decides when Collect and Pay is appropriate under its rules.

Collect and Pay provides a collection service and access to enforcement, but it does not guarantee successful recovery of every payment.

The paying parent will be charged 20% of their payment, and the parent receiving this money will be charged 4%. 

References

1. Money Helper – Divorce Costs