Ex gets directors loans as income
January 15, 2013
My ex is in receipt of directors loan and therefore this is not deemed as income by the CSA. However, my entire divorce and the maintenance was agreed on the basis of him earning director’s loans. So, this is an utter nonsense.
In any case it is a loan and any directors loan over the sum of £5000 has to be repaid. This is where the tax liability kicks in and therefore this is then an income, when you are liable for income tax.
I have a mind to contact my local MP as this loophole is utterly disgraceful.
This same loophole will permit such individuals to claim working tax credit as they can declare a zero income given they are paid in the form of a loan.
My ex is also entitled to child benefit. He earns(takes in excess of the new £50k limit), but there is no information to be found about those who are in receipt of directors loans.
My question to the CSA was how would he be able to rent or take a loan or have credit cards if he did not have an income?
As you can see the entire system is a shambles, but I will continue my fight and if I am successful I will make it my duty to spread the word in how to overcome the many hurdles I have experienced, in order to help others avoid the distress and tireless campaign to see justice done.
The sooner ex partners understand it is the children that lose out and not a game of wills and strategy to score points against their former partner,the better all concerned would be.
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4 Responses to “Ex gets directors loans as income”
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Michael – CSAhell.com staff
1 month, 3 weeks ago
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Unfortunately the CSA cannot class a Directors Loan as income so this will not be taken into account in any MC they process. Another loophole that I am sure a lot of NRP’s are able to use to their full advantage – address the issue to your MP
If your ex is in receipt of Tax Credits these can be taken into account for MC purposes – if your current MC does not include Tax Credits then contact your CSA office and ask for a re-assessment
I wouldn’t waste your time, he’s using a classic income management technique that is perfectly legal and is used by many people. You will never close this or many of the other income management techniques that are used and not specifically used to target CSA.
This is disgraceful – I think that any father or mother who does not willingly want to pay a fair amount for the welfare of his/her children, based on their earning capacity, should lose the right to be considered a parent. Becoming a parent is a life long responsibility and when relationships breakdown that responsibility does not end. People need to realise that maintenance ultimately benefits the child more than anyone else and allows the resident parent (who often has to take the difficult decision to earn less to be there more) to do things for the child such as; music tuition, sports clubs and holidays that they otherwise would not be able to do. It would do people well to realise with rights always comes responsibility. Yes a parent has a right to spend time with their child but they also have the responsibility to financially and emotionally provide that child with the best life they possibly can. If they are hiding behind tax loopholes they are not doing this and should not enjoy their rights. Lets face it they obviously do not care that much for the child if they do not want the best for them!!
You are confusing the loan income rules from companies. The £5,000 figure applies to a Director who has borrowed money from his company. The Directors Loan in a company represents taxed money that the Director has previously invested in the business or not taken out over the course of many years. These funds have already been taxed and are therefore not income.