CSA

Can anyone advise please?

For csa payments for self employed, is it calculated on full monies gained or monies after tax?

We have been paying csa on money invoiced, but after doing tax return after expences it has shown we havnt earned very much at all...which figure do the csa go by?

If your self employed, then I'd suggest forming a limited company.

Your spouse should be paid hours worked x minimum wage.

Any profit, once all company expenses had been paid, would be go to the shareholders as part of a dividend payment; you and your spouse could both be sharehorlders effectively splitting the payment between you.

Your ptr would be assessed on his wages + dividend payment.

The short answer is you really need an accountant. Apart from the CSA it will also save a lot of money on tax generally.

We have an accountant but she hasnt said anything about csa.
We know his ex will demand a review of her payments once his tax return has gone in....she is hoping we owe her more money. The thing is, if they calculate on the top figure then we owe her alot more money....but if the calculate payments from his earnings after expenses then we are fine.

For instance if he told csa his average earnings from what he invoices is: 22k
Accountant calculates 32k
But after expences etc its 13k

what of the 3 earnings will the csa calculate his payments on?

What I did when I was self employed was...

1. pay myself a wage x hours worked. You obviously deduct income tax and ni to give a net figure.

2, pay myself a dividend based on the profit once all company related expenses had been met.
The two figures together was my declared income. If two of you are running the business then presumably the dividend would be split between you both, thus lowering the overall income for your ptr. The important thing to remember is that the company and your ptr are 2 separate legal entities. So even if the company has a high turnover, it is only the actual profit which could be classed as income he receives. Hope this has not bored you into a coma.
How you have set yourselves up? I was a limited company and found that best way to operate. The accountant I used was happy to produce wage slips from the company to myself as proof of income.

Csa is calculated on nett income after tax, ni and pension contributions have been paid. Any other allowances which are tax free are also removed from the net income so if for instance you had a job which paid a travel allowance etc this would also be taken out.

In terms of se income it wouldn't be done on the gross income because obviously there are necessary business expenses such as suppliers that have to be paid or there will be no business.

Zonked's suggestion going forward though is a good one.

T

Thanks so much for your advice. I am going t have a talk with hubby about setting a business up then....may come back soon for more advice Zonked/, x