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Going self-employed
If a non-resident parent is self-employed, they must still pay child maintenance in the same way as any other non-resident parent. We will work out the amount they should pay based on their income and the number of children they are paying child maintenance for.
The only difference is the way we work out earnings.
How does the CSA work out earnings from self-employment?
If the non-resident parent is self-employed, we will work out their average weekly earnings for the most recent tax year. However, there may be some times when we cannot work out earnings from self-employment this way. For example, if the non-resident parent has only recently started self-employed work, we use details of the gross income (all the money the business, rather than the non-resident parent, has earned). To work out earnings, we then take away from the gross income:
- any reasonable expenses paid to run the business (not including capital spending or business entertainment expenses), and
- VAT (value added tax).
Once we have worked out the non-resident parent's earnings, we then calculate their net weekly income.
There are two differences on how child maintenance is worked out on the old scheme:
- We calculate the non-resident parent's earnings and then their net income
- the exempt income is also worked out differently - we do not allow travel-to-work costs to be included as part of your exempt income.
You can find out how to contact us to tell us about the change to your circumstances here.
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