Is it best to go self employed or umbrella - from a CSA point of view?

[Hemingfield]

Thanks again for the responses!

Does anyone know of any 'how to' references to set up a Ltd company for IT contractors?

Brillopad - I am not going into details suffice it to say that I see my eldest as often as is possible (given the distance my cheating ex purposefully moved from me, her often unreasonable and constantly changing conditions for visits and funds permitting). My two youngest live with me. All three children are very well cared for and happy apart from not having me exclusively.

I resent being tarred with sweeping generalisations, especially when it comes to those relating with the CSA and am sorry to hear that your experience has cast a dim view on non-resident Fathers. I've never missed a maintenance payment and have 'shirked' nothing. I would kindly ask you not to imply otherwise in my case. If you wish to advertise your issues with men then please do it elsewhere - not all Mothers wear halos you know.

My intention is to try and improve the financial situation for my Family without (as SockPuppet so addequately put) it all being funnelled into my ex's shoe collection. Nobody loses out.



Hem

[jimjam]

Csa

Hello Hem,

I am a contractor with 2 children, and I now face the issues of paying for them and possibly with the involvement of the CSA. I have a limited company.

Can you give an update on how your situation went? You can contact me direct if you like.

Regards,
Jeremy

[Swamp Thing]

I completely agree with Hemingfield's last comments, being in the same situation myself. Because of the poor finance agreement my ex negotiated in court, she subsequently hit back by removing my kids abroad. I am contracting now so that I can see them once a month, and flights, transfers + accommodation set me back £500 each time. Plus I have them in the UK for summer, Easter, Xmas and half-terms. So that’s £6k p.a. I spend on facilitating contact abroad, plus an unknown amount for UK contact. I have seen the relationship between my kids and me blossom because of the amount of time I set aside to facilitate contact.

As a ltd company director I set myself a modest (N.B. not a pi55-taking) salary, and the rest as dividends. The maintenance comes off my salary, the dividends are off-limits.

I am perfectly happy with this, and entirely comfortable that I’m not conning my kids. Why? Well, the effort I put in to contact means that I could actually claim a maintenance reduction, but I’ve let that go. The amount of travel costs also means I could claim a maintenance reduction, but I let that go. Plus I’ve never missed a payment in my life. All because I need life to continue and go beyond the fractious/transactional relationship the ex likes to contrive with me. However in return I won’t have the ex going forensic on my company business.

So Hemingway makes entirely fair points, proving that non-resident parents aren’t all deadbeat dads avoiding maintenance. FWIW, I would be a bit wary of comments coming from any F4J poster (past or present); I think FNF present a more balanced view.

Keep up the good work Hem!

[TheFaQQer]

As the former committee activist co-ordinator for f4j...

Really, you should have mentioned it in passing. Have you ever been arrested?

[TheFaQQer]

Found this on page 43:

http://www.csa.gov.uk/en/PDF/leaflets/new/CSL303.pdf

"Net weekly income
The amount of income (usually pay or salary)left after taking off
things like income tax,National Insurance and payments into a
pension scheme.Bonuses also count as pay or salary.We don ’t
normally count dividends paid to a director of a limited company,
unless the parent with care asks us to take account of them.
We count tax credits and any money the non-resident parent ..."

So if the parent with care asks them to look at the dividends, then they will do.

[Swamp Thing]

So if the parent with care asks them to look at the dividends, then they will do.

Perhaps, but the answer is in the wording: they will 'look' at dividends. That is a long way from finally determining that dividends are completely in scope and brought into the calculation.

There are many arguments to bring into the mix, e.g. the erratic nature of a contractor’s workflow, benchtime, and the way that dividends smooth out a contractor’s income quality (or perhaps no divis at all, it’s all profit retained within the business). What’s an ex to do if a contractor is 6 months on the bench with no back-up income? She’ll have to go without because he’s unemployed. Or the pragmatic view is that divis help to smooth such economic shocks. That’s just one argument; there are many more, so the point is, the treatment of divis is not that they are automatically in scope.

[BrilloPad]

Really, you should have mentioned it in passing. Have you ever been arrested?

Funny you should mention that.......

Did I tell you what the head of f4j once called me?

[TheFaQQer]

Funny you should mention that.......

Did I tell you what the head of f4j once called me?

No - what did he call you?

[TheFaQQer]

Perhaps, but the answer is in the wording: they will 'look' at dividends. That is a long way from finally determining that dividends are completely in scope and brought into the calculation.

There are many arguments to bring into the mix, e.g. the erratic nature of a contractor’s workflow, benchtime, and the way that dividends smooth out a contractor’s income quality (or perhaps no divis at all, it’s all profit retained within the business). What’s an ex to do if a contractor is 6 months on the bench with no back-up income? She’ll have to go without because he’s unemployed. Or the pragmatic view is that divis help to smooth such economic shocks. That’s just one argument; there are many more, so the point is, the treatment of divis is not that they are automatically in scope.

No, they aren't automatically in scope, but they could be included in the maintenance. The advice that Google shows is that it is unclear at best.

[Hemingfield]

The conclusion to this tale is...ongoing.

It appears that each and every rule that the CSA supposedly adheres to can be overridden through departure. Even the limited company being a legal entity in its own right can be waived by as they put it 'lifting the corporate veil'!

The only way to beat the CSA is by having no income. Some, who have ex's with an ounce of civility about them have escaped through personal agreements. I envy them.

The bottom line is that you should just plug a webcam into your wallet and give them full access - that might mean you don't have to fill in a thousand painful documents asking what plans you have for the money down the back of your sofas.

I am currently having to defend the financial buffer I have built up in the business accounts to cover bench time!

Swamp Thing - feel for you mate. Don't know about you - I can put the money issues aside, I take warmth from building the relationship with the kids but it's the hundreds of hours and massive amounts of effort that the ex has put between you and your kids that I just can't excuse. I'm personally looking forward to when they're old enough to decide where they want to live.

Jimjam - talking with other NRPs who are also contractors, take my advice. Don't try to use a Ltd Company to hide behind. Try and get PWC to agree to sticking at the rate when you were perm and give yourself the same salary (if you can - I tried going for a private arrangement which was refused). Yes - you do have to pay more tax, but believe me the other option will leave you wide open to grabbing hands.

As you may pick up - I'm not a great fan of the CSA.

Hem