Durham Legal Services - the Variation experts
The automated 2012 Child Maintenance calculation is based on information gathered from the HMRC interface. Under the same rules, there are several other sources of income which can be used to calculate a child maintenance assessment but, in order to include this income, a variation application must be made. The introduction of a variation can have a huge impact on a maintenance payment. When making a variation, the law requires it to be just & equitable and this can open up ways to extend the scope of the variation legislation. This is why it is important to have representation to correctly present or defend your case. We also highlight that once a variation has been made, there is a real possibility that it will remain in place for the life of the case.
What does a Variation cover?
Originally, a Departure/Variation was introduced under anti-avoidance measurements. Over the years, this legislation has developed in such a way that is is particularly applicable to parents who own their own company. If a paying parent owns their own company, their status is PAYE and the current system does not necessarily take into consideration dividend payments. This can lead to allegations of fraud and deliberate hiding of income. In addition, if there is retained profit or a Director's loan account in operation, it could be seen as an attempt to avoid a maintenance liability, even though best business practice encourages this. Whether intentional or not, the only way to investigate this scenario is by way of a variation application.
Where circumstances exist that a spouse or partner is a shareholder or employee of the paying parent's company, without the proper consideration being given for the shares or salary, an allegation of diversion of income may be made. We strongly recommend you get our advice on how to deal with this situation.
Many parents who have used the last CSA system have relied upon lifestyle variations but under the CMS, this no longer exists and they will probably have seen a huge decrease in payments received. A lifestyle variation cannot be made but with the correct representation and evidence, the concept can still be used to determine credibility which can lead to an ASHE assessment.
Alongside issues of retained profit and diversion of income, another area which has changed is how assets in the form of land and property are dealt with. All these areas are extremely complicated and the best way to navigate to a successful outcome, whether you're a Paying Parent or a Receiving Parent, is to get expert help from an experienced specialist with an understanding of Tribunal procedures.
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