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Company car not income for child support calculation

Does a company car made available to a non-resident parent (‘NRP’) by his employer generate income for the purposes of calculating the NRP’s child support liability? That was the question that fell to be determined by the Upper Tribunal Administrative Appeals Chamber in KM v Secretary of State for Work and Pensions (Child support : calculation of income).

As we shall see, it is important to note that the case was decided under the old (original) child support scheme, which has since been replaced twice. Confusingly, the judgment refers to the old scheme as the ‘1992 scheme’, presumably because that is the year when the regulations relevant to the old scheme came into force. The old scheme is actually usually referred to as the ‘1993 scheme’, as that is when the child maintenance scheme first came into operation, although I have also seen it referred to as the ‘1991 scheme’, after the year that the Child Support Act was passed.

The case concerned an appeal by the NRP against the decision of the First-Tier Tribunal (‘FTT’) to include in his income the sum of £10,928, being the notional income attributable to his company car for income tax purposes. The NRP did not actually receive any car allowance from his employers, and he argued that making a company car available to an employee does not involve any earnings for the purposes of the regulations relating to the 1993 scheme.

The Upper Tribunal Judge accepted that argument. The relevant regulations identified certain matters that must be included within “earnings”. These included “any payments made by the parent’s employer in respect of any expenses not wholly, exclusively and necessarily incurred in the performance of the employment”. The NRP had not received any such payments. Accordingly the FTT had erred in law by taking into account as earnings the taxable benefit ascribed to the NRP’s company car. The provision by an employer of a company car for the use of an employee is not a payment in kind – it generates no earnings for the purposes of the relevant regulations. Therefore, any notional valuation of the benefit derived from a company car for income tax purposes must be left out of account in fixing the NRP’s earnings for the purposes of the relevant regulations.

The appeal was therefore allowed. The decision of the FTT was set aside and it was directed that there be a new child support calculation, on the basis of the NRP’s net income without the notional income attributable to his company car.

As an aside, it is notable that the parent with care (‘PWC’) did not want to get involved in the proceedings, putting forward no argument and simply making the submission that the Child Support Agency had taken the NRP to ‘court’, not her. Obviously, she may just have been wanting to stay on good terms with NRP, perhaps for the sake of the child(ren) – I suspect that some of these cases where the PWC is not directly involved can cause some strain between the parents, which obviously cannot be good for the children.

An interesting question (that is alluded to in the judgment) is: what would happen under new (2012) scheme? Essentially, details of the NRP’s income would be obtained in the same way, albeit from information supplied by HM Revenue and Customs (‘HMRC’), rather than from income supplied to HMRC. However, that is not to say that the information would then be used in the same way as under the 1993 scheme. Now, I’ve had a quick look at how it would be used under the 2012 scheme and my understanding is that HMRC would treat the benefit of the car as earnings, and that being the case those earnings would be included as part of the NRP’s income for the purposes of the child maintenance calculation. However, please don’t quote me on this, and definitely don’t ask me how the value of the benefit of the car is calculated – the rules are horrendously complicated, and time constraints preclude me from looking at the matter in the detail required to provide a definitive answer.

The full report of KM v Secretary of State for Work and Pensions can be read here.

The blog team at Stowe is a group of writers based across our family law offices who share their advice on the wellbeing and emotional aspects of divorce or separation from personal experience. As well as pieces from our family law solicitors, guest contributors also regularly contribute to share their knowledge.

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  1. Andrew says:

    it makes sense, and it would make sense even if the RP pitched in. A company car is very nice but it’s not money you can share. It would be ridiculous to get into arguments about how much it is saving him – he might swear holes through pewter pots that if he did not have a company car he would do withut “wheels” altogether!

  2. Luke says:

    The CSA should check out whether he has a canteen at work, if so it may be subsidised and maybe they could get a cut out of that ??? I think the oxygen that he breathes is more difficult – he doesn’t pay for it but I am not sure it would qualify as a ‘benefit in kind’.
    What it is to be a non-resident parent under the CSA…

  3. Yvie says:

    What about the shirt off his back? That must be worth something, surely.

  4. Paul Tate says:

    Thank you for this post I’m having exactly the same challenge on 2012 scheme. They are still using the same calculation and state they no nothing about this case . I’m starting the appeals process but getting to acknowledge that the 25% rule does not even come into play as it regarding a potential miscalculation using this case as a reference was a challenge in its own right !

    • Mark t says:

      Hi Paul,
      I am today in the same situation and wishing to appeal for re consideration! They have mentioned I have no chance to speak as this is legislation. Please advise me of any further help as this is very unfair treatment. I do not know where to turn.

      • Paul says:

        I’ve had the same response its legislation and on a court can overturn it . They agree in principle my argument and say I’ve got a very good case but I still need to take them to court to get what’s wrong right. Is this not a waist of tax payers money ?

  5. Paul tate says:

    I feel your pain mark t I’m still challenging use this case as my legal challenge as the calculation for a company car is the same it is not a payment in kind and the judge has ruled if not a payment in kind it cannot be used. They are still talking to me and asked me to get a statement from HMRC to that effect of which I’m awaiting. Don’t hold any hope it will change their stance

  6. Paul Tate says:


    2012 scheme section 38 current income , identifies income of kind as part of the calculation this includes Beniefits but , the potential error in law is the calculation used currently as its my understanding and I’m awaiting a response they are using a company car as income recived subsection 2 of 38 instead of income via a benefits code which is subsection 4 of 38 . This is a big difference in monetary value

    • Stuart says:

      Thanks for the update Paul. I am also challenging them on this. I have a “leased” company car which to me is not an income as the vehicle is owned by the company. Would the calculation change if you came to an agreement with your company that they class the car as a pool car with you having sole use??

  7. Lee says:

    I currently pay my CMS payments, and have just taken a new role with a company car. I have just had the chance to upgrade as the car was 3 years old a new car was allocated to me.
    I have opted for a smaller car as the benefit in kind P11D value is lower.
    How can a company car be used as income when calculating CMS payments? A company car is not used when claiming tax credits!

    • Mike says:

      I have just been transferred to the cms from csa and about died when they told me what my gross income was supposed to be! Not only are they also including my company car that I need to carry out my job but also medical insurance.
      I would be really interested if there were any further updates on this.
      Luckily my lease is due soon and I’m thinking of changing to a pick up or van to reduce the double tax charges I’m currently faced with, I’ll hate driving it every second but at least I’ll be able to live.

  8. Non resident parent says:


    I have been in discussions with the CMS and HMRC for over a year now about the benefits in kind, mainly because of my company car. I am the non resident parent as I cannot afford to live even near the area where the resident parent lives, and the children go to nursery in that area. Hence I have the children less nights even though we have share residence, therefore I pay child maintenance. (By the way he is self employed and hide his earnings behind a “company” where he is the only stakeholder).
    This is a vicious circle as the less money I have, the further away I am from the children, so less nights with them, therefore higher maintenance I have to pay.

    I keep arguing that it does not make sense to include the benefits in kind as earnings when it comes to calculate the maintenance! I cannot pay the other parent with a piece of the car, can I?

    Also, I understand the international law supports this.

    Can anyone please help??? I am desperate!!! (and banckrupted)

  9. James says:

    Just been told No comp car makes no difference
    It’s taxable
    HMRC should be giving out earning from employment only
    Robbin gets no issue with paying but come on

  10. Rossy says:

    Hi James

    So are you saying that my company car should make no difference and my payments should only be against my wages?

    • James says:

      Hi Rossy
      CMA use taxable income not taxable salary
      As car benefit included in taxable income it IS used by CMA for assessment purposes as would be private health care gym membership fuel benefit 2nd home rental income
      Think only pension excluded sorry

  11. Joshua Liddell says:

    Hi I am in the same boat as everyone here. I have just spoken to HMRC who are going to send me a letter stating my salaried income and my benefits in kind in a separate document.

    I am also going to send the CMS a copy of my contract of employment stating my current annual salary.

    Furthermore I will send in previous monthly payments and also reference the case above to push my claim that a company car should not be included in any CMS calculation.

    I will update here once I receive a response from CMS.

    In the meantime I would be very interested to hear who everyone else gets on with their cases, fingers crossed there will be a breakthrough and common sense will prevail then this issue will be resolved for all of us.

    Good luck


    • James says:


      Did CMA advise you to get letter from HMRC ???? And send wage slips
      I did same as you plus 3 p60s and 12 months wage slips
      HMRC confirmed my income
      But CMA Base it on taxable income which includes comp car

      The CMA won’t tell you about company car being used for calculation and they don’t care

    • B says:

      Hi there

      Did you have any luck with the above? I’ve tried the same several times during the last 3 years with no success.
      Please let me know if it worked for you.

      Thanks and good luck

  12. Mr Justin Burton says:

    Please click on this link as it might help us all, I’ve shouted and screamed at them on the phone about this but they don’t care all they want is the max amount of money it’s a joke.

  13. Nick says:

    Thanks for this tread, I was starting to think I was the only one this was happening too.
    They’ve basically calculated mine on just u der 5k a year. So that’s calculated into my earrings and I’m paying more CMS
    This can’t be right.. It’s daylight robbery!!
    Don’t get me wrong I’m proud to pay for my son as there are fathers out there that dodge and leave mothers without anything g. But let’s be fair about it for god sake!!
    I’ve been told there is nothing I can do, basically roll over and take it.
    Thought about seeking legal advice but that’s another cost I can’t afford.
    Thank god I haven’t a fuel card too, they take that into account too so that’s another 5k on top totalling an extra 10k earnings in the CMS eyes.

    • Jonny says:

      Like many of you, I’ve been arguing this injustice for nearly a year now. My car payments go through as notional payments on my payslip for tax purposes (Payrolling of benefits) and so I therefore don’t actually receive the money and it doesn’t feature in the make up of my salary. It works this way because I get personal use of the car (used to travel to see my kids) and therefore have to pay tax on it. The notional amounts are a percentage of the cars P11d value (what the car was worth when new) and these increase slightly year on year, I’m told it’s a method that HMRC are actively encourgaing companies to use.
      CMS request the gross earnings off HMRC and this will of course include any taxable benefits, including your notional payments…. Completely and utterly wrong!! (in my opinion) Imagine going the Bank and asking for a Mortgage or a loan and citing your notional payments as proof of your ability to repay that debt… it ain’t happening!
      I’m a big advocat of the absent parent paying to support their childrens upbringing but we should only be paying what we can afford and for me that can only be calculated on your actual income.
      In my opinion, CMS need to concentrate on those parents that are avoiding paying for their kids by not declaring their income correctly, that’s were the CMS shortfall in monies collected lies, further punishing all of those responsible parents that do pay for their kids is wrong….. Rant over, good luck everyone.

  14. Ralf says:

    I changed from a CSA arrangement to the current Child Maintenance system last October and due to my company car I saw my payments increase by £150 a month. I accepted this after numerous phone calls and checking their sums. However, I’m now looking at changing my job which would increase my gross pay by around £10k, while giving me a higher spec company car with a £10k increase in list price (they already have the car so I can’t select a lower P11D value or emissions). After doing the sums it appears that my CMP will increase by several hundred pounds leaving my nett monthly earnings pretty much the same as they are now, with more stress for the job and even if I change the car when it’s up for renewal, as my gross taxable income won’t drop enough, my CM payments will stay the same. So it looks like I’ll have to stick with my current job and keep the payments as they are (don’t get me wrong, I’m perfectly happy for my payments to increase, as long as my nett pay also increases for the extra work / hours I’ll be putting in). How can this be right?

    • Andrew says:

      This is just one aspect of the insoluble problem: how do you play fair by children without leaving the NRP with no motive to better himself?
      As we used to say at school; an irresistible force meeting an immovable object!
      Joint life spousal maintenance is similar except that there you deprive two adults of any reason to try to make more of themselves.

    • Mother of 2 says:

      I am in a pretty similar situation!!!
      Can anyway please help???

      I feel like giving up everything and just live on benefits, it seems to work out a lot better

  15. Brian says:

    This is very sad to read and in complete agreement. The NRP get’s screwed over beyond what is fair and it does remove the drive to better yourself if you see no or minimal benefit. Most dads are sick of the battle with the NRP and/or CMS so who has the money or fight left to fight a failing battle.

    I lose the BIK off my tax code. They add the BIK value to my income but I lose the same in tax free income. How can no one see this in a double wammy scam and totally unfair is beyond me. What this needs is a rich dad to take it to Court and get a precedent set. Where is he?

    If you can, over pay your pension, use child care vouchers if you need, cycle to work scheme. The fact that RP income is not even considered is ridiculous. I tried to make a personal arrangement like previously but she’s not interested. Maybe if CMS interrogated the RP’s income also, then there would be more inclination for a mutual agreement outside of CMS. What is also completely wrong is that the RP can make an application to CMS and pay £20 to take on a case – IRRESPECTIVE OF THE FACT THE NRP HAD PAID THE AGREED AMOUNT ON TIME ALWAYS. The system is a stress causer and available to the NRP as a spite mechanism. They should only take on cases when a parent doesn’t pay, misses payments or the amount is not agreed. If not agreed, the parties should be forced to mediate at shared cost first of all – just like in a court application. Overall a better relationship between NPR and RP will be maintained and this is in benefit of the child. Isn’t this what it’s all about? CMS ROT IN HELL WITH YOUR POOR CUSTOMER SERVICE!

    • Jon says:

      Well said Brian,
      The old CSA struggled to collect a large part of the national NRP payments, largely down to the fact that a lot of them didn’t declare all their (cash in hand) earnings, builders, taxi drivers etc… The shortfall was huge.
      The new system still doesn’t capture that particular group, so in order to try and bridge the gap and make themselves look more creditable and improve their figures, they take a little more off the group they can impact.. people like us.
      I’m a massive advocat of the NRP paying to support their kids, but it has to be fair and this system simply isn’t… in my opinion.

      • Jon says:

        Just to be clear.. I’m not picking exclusively on all builders and taxi drivers, I use those groups based on personal experience, I appreciate it doesn’t apply to all builders and taxi drivers… but I know of a number of cases of people who earn good money but don’t declare it all and consequently pay a minimum child support… Not something I condone, just a fact you can’t ignore.

  16. DC says:

    Hi, I have started a new job and employer makes a payment each month on my wage slip which they call ‘Car opt out’. It is not what I would traditionally call a company car as I have to buy the car, run it, maintain it etc and need it to complete the job and travel 2 hours every day to get to work. Is it right for CMS to add this car payment to my Salary to start their calculations with an inflated Salary figure? Any advice would be much appreciated?

    • James says:

      Hi D.C.
      They base it on Taxable income not Taxable salary
      So yes they can . It is disgusting that this happens
      I’m in same boat pay tax on 9000 per annum for company car this is included as taxable income

      Have complained tons of time to no avail even my MP
      not interested
      To sensitive

  17. David says:

    I have read all the above – I have just spoken to the CMS after being moved from the CSA and they told me the very same thing..
    So not only do I pay Tax for the vehicle but now its BIK is added to my income and I am screwed by the CMS for a further slice % of something i don’t see??
    So i might well ask my company to take my car away – the tax deducted will improve my take home then ill get my own car using that budget… assuming my company will allow me to do this??
    Why do parents that want to pay end up carrying the can for those that avoid it…
    Why has no MP done anything about this… ??? id like to hear from anyone that has had any success.

    Update to this – I have made an appointment to see my local Conservative MP Ill let you know how I get on… also I have noted the Citizen Advice page that categorically states that Company Cars are not part of earned salary benefit that should be included in CMS Calculations…

    • Jonny says:

      Good luck David.. I echo your comments 100%, I look forward to seeing how you get on.. it’s an absolute sham.

  18. Simon Dando says:

    Again like many I was thinking it was only me this was happening to. This is now my 3rd year and in that time my payments for my 3 kids have gone to 521 to around 920 per month now.

    Like all of us here I cannot begin to understand why a company car means more maintenance. It is a double screw as I am paying tax on the car and then more maintenance.

    So on their logic, I could not have a company car (needed for the job I do though), pay less tax so I take home more but pay less maintenance. All sounds a bit backwards to me!

    I do not have a car allowance. A car owned by the company is allocated for me to use and I pay tax on the P11D value. I am not paid any extra for having it. Also, my fuel costs are deducted from my monthly salary so when I asked the CS people about taking that into account if they are insisting taking the car into account, I was met with a pause and then a comment of ‘yes I can see the deductions on your pay slips…….but…….well I’m sure you get than money back in other ways’

    As someone said, we need a rich dad to get a court case together or we all get together to put this wholly unfair system in the spotlight once and for all.

  19. Sean says:

    Just read through the thread, I have today come up against the same issues, I took my examples to an extreme by stating to the CMS that if I was to not earn a salary but was given a company car that had a taxable benefit of lets say £10k (so to be clear no hard cash paid into my bank account whatsoever, only the virtual value of the company car), then I would still have to make a payment………………………………… another example I used was to have a salary of say £10k and the company provides a £150K Rolls Royce as a company car with a BiK of say £52K then I would be paying Child support that would physically leave me with no money and I’d have to go and get a monthly loan to meet the payments……………………Examples are to the extreme however this is the ludicrous situation the law has left itself in. Causing friction between amicable agreements between divorced parents let alone the friction between disputing parents.

  20. Peter says:

    Just read through this thread as I am just about to change jobs and get a company car. I am also tomorrow appearing in court as I am taking the CMS to task over there calculations of my payments. I changed from the CSA to the CMS despite approaching the ex to pay direct in December but last January my payments went from £760 pm to £1100 overnight. No change in salary no extra BIk no change, I don’t have a C Car no change in anything. Despite call after call to CMS my only recourse was to go to court through the appeals process. To cut along story short the way the company accountant’s paid my work expense’s i.e trains to meetings, parking, flights to head office in Amsterdam, it came up as a BIK which I then had to write every year to HMRC and it was removed. No problem under CSA but with CMS all change. Had the same arguments and same conversations with CMS as it seems everyone else has had. I’ve had enough of this like all of you I’ve paid on time every time but the ex use’s the CMS and kids as a weapon although we’ve been separated and divorced 9 years. I’ve had to take her to court just to get access to my kids because she refused to let me see them even though we had joint custody. I’ve won every time but it’s tiring and you do start to think Dubai looks tempting!! I’m going to start a fund raising page to get enough money together to get a QC to take the government to task in the courts over the CMS calculations as a soon as I’ve set the page up I will post the link on here as well as a lot of other sites and blogs. I’m going to speak to Legal counsel next week to get an estimation of costs. I’m sure if every NRP facing this issue put £50 in bearing in mind the potential saving we could get enough to challenge the government in the courts. Let me know what you think and wether this would be of interest. Regards Peter
    *This comment has been moderated*

  21. NRP2 says:

    Oh man. This is depressing. I’ve just given up a car allowance and taken a company car. The car allowance was a generous £7,000; 10% of salary.

    I’ll be honest, I actually thought it might be a machiavellian way to pay less Child Maintenance… I calculated £50 less per month based on a Gross salary reduction.

    I haven’t got into the P11-D numbers yet… Will be interesting to run the numbers.

    I have currently a family based agreement. Given the above information I won’t reduce it at all. I’ll just keep status quo and hope the ex never reads this. If she does it looks like my pension is going to get an amazing overpayment contribution.

    If your company offers It, ask them for a salary sacrifice car plan. They exist and it works like the cycle to work scheme. This would potentially give the best outcome.

  22. Brian says:

    I’m just in the process now of giving up my company car which I need for my job as the CMS are once again trying to take 16% if it’s value and add it to my monthly maintenance.
    What some guys need to realise is that you can argue up to a point.
    If the CMS are at least 25% wrong you can appeal it with pay slips to prove and they will take your actual salary from the pay slips, provided the figures are at least 25% different.
    My car BIK is just shy of £10k including fuel card, I’m just at the point now where the scales are tipping against me. I’ve been successfully doing this for 2 years, however this year my maintenance is going up mid term (because they “forgot” to recalculate it.
    Net result, hand back the car, it then can become a pool car, goodbye BIK. Goodbye personal allowance etc etc.
    Saves the annual argument over who is right and who is wrong.
    They are wrong, it’s clearly wrong. We pay tax on something that’s not ours. Then pay a cash equivalent of that out in maintenance.
    I’m pretty sure if I was 25% out on my tax returns they’d be all over me like a rash, but they can miscalculate by 24% and you’re screwed paying the higher figure until such time your salary is 25% lower than the figure they think you earn
    Top that off with the stupid way they calculate things – I earn a commission, varies greatly however they take your 2 recent wage slips and then decide that’s the average they expect you to earn. It’s complete rubbish. I work in factual calculations that accurately represent the true figures. They can’t calculate jack correctly. It’s a complete shambles, but there’s f all you can do about it.
    I can wait for my next calculation to come through. The anxiety is high. But do you know what CMS, the next step for me is to take a volountary pay cut to get my so-called income down to that 25% value and back to the £520 it should be, not the close to £700 you’ve decided you want. Ridiculous that you don’t leave me as much money for me to live on as you take away. Well, I know your game, I’m ready.
    Failing that. Vietnam (thanks for publishing the list of countries that don’t have enforcement agreements) That’s where I’m going for the next 5 years. So when you reject the £520 bear in mind your crazy ass rules will leave everyone with NOTHING.
    I got a bit ranty there….

    • David says:

      Brian i share your view and i went to see my local MP – Mark Menzies about this. He kindly offered to write to the CMS to ensure that i was paying the correct amount however as i tried to explain unless there is a 25% difference it makes no difference. I suggested that the government need to step in and look at this further as its completely unfair that a tool that is given to carry out a job is then used to calculate the child benefit from. I have down graded my car from £10k BIK to £5k by swapping to a hybrid. i then increased my salary sacrifice to my pension to further balance the increase in my pay generated by the swap of car… point is and people reading this need to understand – its not a matter of trying to get out of paying for our children but its about trying to survive. My ex enjoys 3 holidays abroad and enjoys the high life and i can barely afford a trip to Blackpool beach for a donkey ride… There are many Non Resident Parents in the same boat – both men and women…
      So why dont the CMS put some resource into chasing the NRP’s that either leave the country to avoid paying at all for their children or go self employed to pay as little as possible? Why pick on the ones that want to pay a fair amount and let the ones that can be cute get away with it????

      I went to see my last MP John Pugh and all he could say was ‘give it time, you will become convenient and the problem will go away’ Well John its 4 years down the line and you were very wrong so instead of fobbing constituents off why not get off your backsides and do something that is fair and protects the little people the system is designed to protect… you know the future generation… how can teaching youngsters this is the correct way to behave going to affect their relationships in future life…

      Also what about situations where the NRP decides to use the other tactic of limiting over night stays just to fall under the banding triggers that generates more maintenance for them? I am having to go back to court just to get what is already in an order… how can that be right – not just the financial implications but also as the author of this blog points out the impact upon the children…still i doubt the legal profession will mind that will they? Do they actually care about their clients or rather protecting their income?

      I cant believe that with the resource and people this affects more has not been done about this as the topic is far greater than company cars… the system is unfair and biased and needs review.

      Perhaps John Bolch might want to commentate on this?

  23. Stuart says:

    I agree with the comments here – we as NRP all accept the payemnt for the upbringing of our children in the residentail main home. however we are financially exploited – this year as I have moved into this new system from the CSA to CMS I am now £375 per month worse off because I have a company car and private medical cover – the result I have had to stop supprting my eldest children with university living – meanwhile my EX has had the house painted and been on three foreign holidays this year ( my daughter has been abroad on holiday this year I TOOK HER !!!)
    I too have met with MP Seema Kennedy and feel like I have been fobbed off like others in this post..

    So my question is how do we go from talking about in blogs like this to actually making a difference and creating change???

  24. Alistair says:

    Have just read through this thread with great interest.
    Where I work, we are now being switched from using pool cars leased to my employer, to having the same pool cars issued individually.
    Really disappointed to learn that I will be having to pay for Child Maintenance as a result, not that I would ever not support my child but things are so tight as is (after being left to pay £1500 mortgage payments on my own!!! she left me for someone else and left me to deal with everything) that I’m really concerned. Not sure how im going to afford the extra maintenance.

  25. Shaun says:

    It seems we are all in the same boat. Has anybody
    successfully managed to have their cases reviewed/ revised omitting the company car as part of their salary by the CMS parasites.

    I am seriously thinking about applying for a judicial review as I believe this formula to be a breach of European law but I’m no expert and would welcome your input.

  26. Mark S says:

    I’ve spent the last 2 months reviewing my estimated CSA payments for 3 children due to it hitting a record high. I have literally just come to the realization that my company car and private health care is added to my Gross Salary adding £7248 a year. I agree with you all when this CSA calculation needs to be reviewed. I am on a modest Salary 37.5hrs a week but have to work evenings and weekends to make my money up to survive myself. It’s crazy and viscous circle as it works a year behind, so your always trying to earn more money to cover what you earnt the year before. I am currently in a predicament where I am now earning around £10,000 less however this doesn’t exceed the 25% allowance stated by CSA for them to review and change my payments to suit my income.

    If anyone has any luck in going to Court regarding this well overdue matter I would greatly like to hear from you.


  27. Steve says:

    I also have a company car and the CMS take this (£7k) for my gross earnings or “earned income” as they define it in the paperwork we all receive. Now the issue i have here is with this definition. The earn and income verbs according to the English Oxford Dictionary are defined as;

    “earn” is money obtained in return for labour or services.
    “income” is money received for work or through investments.

    Clearly a company car does not fall into either of these categories. So maybe we could focus on this and maybe a judge would see that the CMS are bringing the English language into disrepute?

    You have no idea how much i am seething these days. My ex lives 250 miles away from me. It costs me a fortune in fuel and because they are so far away they do not stay over the 52 night threshold so according to the CMS there is “no shared care”. Even though they stay with me for about 40 night.

    My bloated child support payments are taking away my ability as a parent and preventing me from parenting. My children have a fundamental human right for an opportunity to have a relationship with me as much as their mother and this is being taken away from them. I have always been an active father and paid my way towards their upbringing since the day they were born. However, I do not feel that I am being treated unfairly.

    I am already being penalised in 2 other areas (Travelling costs, Shared Care Costs) and I am struggling to pay for the basic things for myself to live and amassing a lot of debt as a result. The only way I can save myself money is from not seeing my daughters, which is not in their best interest. I have tried to come to a family based arrangement with their mother but she is not interested as it is not in her financial best interest.

    I have a tribunal hearing appealing all the above next week. I will keep you posted.

    • Jonny says:

      Very best of luck. .the sooner this injustice is recognised and reversed the better. . It’s ridiculous that notional payments are treated as earnings.

      • Steve says:

        I had my tribunal hearing yesterday. I may as well have not bothered. The Judge had no appetite to challenge the CMS regulations at all. She was merely there to make sure they had followed the law.

        I made my point very clear that i felt the law was unfair and that i had hoped to find a Judge with some courage to show discretion and realise that the CMS should not calculate my taxable income for the maintenance payments. I reiterated the English languages definition of “earnings” and “income” and how can the CMS add £7k (company car tax value) in order to calculate my CM payments? This was a question she refused to answer.. she only said that this is the law. I asked her if she thought that was fair. She would not answer.. just kept repeating that this was the law. Her only advise was that i should contact the local MP and see if they could escalate this to Parliament to get the laws change. I will be contacting him/her whoever they are so watch this space.

        We seriously need to change this!

  28. Jonny says:

    I feel for you but congratulate you on challenging it in court. .you’ll probably find that your local MP is powerless as it’s not a local issue. Perhaps Fathers for justice or a group of that nature may be able to highlight the injustice at a higher parliamentary level?

  29. Paul Tate says:

    Hi All
    I’ve been through the process and under ITEPA legislation a company car plus taxable benefits are income. There must be another angle we can try ie EU direction on WLTP of which the current tax system fails to meet the guidance. I’m a fleet professional so happy to give guidance on the area to challenge if evidencenot submitted to tribunal. More areas to get them thinking on gives us a glimmer of hope

    • Jon says:

      I understand the tax element of BIK and why the company vehicle falls into that category.. what I can’t wrap my head around is why notional payments are considered income in respect of child support calculations.. taking a percentage of money off people that they don’t actually earn is wrong on every level… Only the CMS recognise notional payments as income (other than the tax man)… Its quite ridiculous and grossly unfair.

  30. Ahron says:

    Guys. I am in the same boat as you all… is there not a yougov petition we could start re this?

  31. Michael says:

    Well, I have just read through the entire thread, and I am horrified that nothing has been done about this. I can DITTO all comments as i am in the exact same boat and have just bene on the phone to CMS to argue the point for over an hour … I think I would have had a better response from talking to a rock! Why has the government (oh that is because we have no true government… to busy screwing the country over with BREXIT/NO BREXIT) hot picked this up? Why has this not bene rectified? why are the press not doing anything about this? There is more news about vegans marching against Beef (sorry I am a Beef eater) then about injustice we all face. I have no issue paying and supporting. But I am finding that I am turning down promotions and progress as i am been penalised to progress. How does one bring this un justice to light for all the parents who support and pay what is fair, not miss calculated. I cannot believe the attitude and shocking customer service of the CMS officers! let me know who or how to get some form of action as we need to bring this to the attention of the law! I will pay what is fair and justifiable. I have a family with my wife, but cannot even afford to get by each month due to CMS, this is despite signing over a house/car all contender in the divorce over 10 years ago. … then CMS got involve and now I am penalised again! Desperate for some help here…..

  32. Thomas says:

    What a great thread thankyou all for your input. another annoyed paying parent (lets be honest here its mainly the fathers)- i hadn’t appreciated until this months annual review that i too am having a company car (which i am forced to take) included in the income calculation, as a consequence i am now paying almost as much for one child as i was for two. All this does is reduce my ability to help the eldest boy who is now attending university. Had an hour plus on the phone to CMS – for once i got through to a very knowledgeable and helpful call handler but the result is unchanged – they only work off the HMRC figures for the previous year. would gladly sign a petition if someone can get it started.

    • Mark says:

      I’ve made a petition – will you sign it?

      My petition:

      Revise Child Maintenance calculation of income to exclude benefits in kind

      The current calc by the CMS includes benefits in kind as if they were paid income. For those who need company cars to carry out their employment this is a child maintenance charge against a “tool” that facilitates earning income. It, as with other benefits, should not be included in maintenance.

  33. Dan says:

    Personally, I would like to see a reform of the Custody law. If a parent can’t pay for themselves to look after the child then I believe the other parent is given the chance of custody of the child, if he/she can’t cope or pay on their own then the CMS comes in and mediates a plan and payments. It would stop this weaponization of children and wicked behaviour we see daily. This milking of mainly males is disgusting and England needs to start coming in line with the Nordic Countries and some US states where joint custody is automatic and therefore most of the child maintenance will not be required.

    If you don’t want to get charged for Benefits In Kind then the answer is, don’t have them, Work freelance as an employee through your own company and put all excess earing to your immediate requirement into a Pension fund. Use a pool car instead of a company car (this is not a BIK), All perfectly above board. Use a SIPP to use your shares/investments/ISA etc count as your pension. All earnings pre tax and NIC including dividends and BIK’s as an individual tax payer are liable to the CMS assessment but Pensions are not taken into consideration. If you pay a normal pension contribution out of your own earnings from your company. The company can invest all its profits into your pension fund, which can include a multitude of assets including commercial properties (Not buy to let dwellings). Use Child ISA’s you can put around £4000 per annum in their name, I think they are counted by the CMS but you could argue in a tribunal. At least you wont pay tax on them on top of the CMS payment.

    This is not financial advice, but some or all of these strategies can allow you to control how much the CMS can get their mitts on, you can then concentrate on your career and life without penalisation. We need Child custody reform in England, but its not on the books at the moment.

  34. Dan says:

    Lady’s and Gents

    It is important to “understand” what the UCC law is and what the Legal system is set up for. We have no fairness in our laws because they are not set up that way, they are set up for companies to operate in. Human beings are very cleverly manipulated into being assets of the company. The only way to protect yourself is to protect your assets behind limited companies and play them at their own game. You wont win by crying, get educated and play the smart game and find a good accountant, they are worth every penny. A limited company can be set up for less than £100 with companies house. If you have a healthy income then use trusts they are powerful and inaccessible to anyone.

  35. Mark says:

    Hi All

    I have started a petition on the Government Petitions website, titled “Revise Child Maintenance calculation of income to exclude benefits in kind”

    It needs 5 sponsors in order to go live. The link to sponsor the petition is below

    Lets put some weight behind our arguments

    • Gary Paul says:

      What an unfair system!

      after 11 years of an amicable agreement my ex has went to the CSA because i couldnt take my son as i moved job and didnt have a vehicle to collect him or drop off at school for 1 night! She would not assist in collecting him as i live 14 miles from his school and no way to drop him off for school, i had no option other to get his older brother to drop him home a night early.

      As i have car and fuel allowance they basically think i earn approx £1000 more a month than i actually do.

      Makes you physically sick and is so unfair.

      I pay for 2 of his school lunches £10 a week, his mobile contract, xbox live and im the sole one whom collects and drops off.

      Ive had to explain to my son tonight ill have to stop all these things and also odd take away and days out.

      Utilmately this is having a negative impact on our life style together makes you sick.

      And my ex is married with several part time and take away delivery jobs?

      I give up

  36. Taylor says:

    Hi All.
    I have read many comments in relation to CMS and payments.
    I currently pay the full percentage allocated for 2 x children across my Salary, Commission and Car Allowance.
    My challenge is, being a senior figure in the business the expectation is you have a nice car and that’s why they give you a healthy allowance along with the maintenance to support the vehicle due to Large amount of mileage I do annually.
    I also receive commission payments quarterly but these are always target dependent, so not guaranteed and fluctuate regularly.
    However both of these are taken into my CMS payments, should I seek advice as my monthly payments now work out at more than a 3rd of my monthly payments after tax.

    • Kate Nestor says:

      Thank you for your enquiry – I have passed your details to our Client Care Team who will be able to advise you. Best wishes,

  37. Mark C says:

    I have read all of your comments with dismay. My BIK equate to almost £18K and have been discussing this matter with the CMS for 3 months with no success. Sadly they all fall back on government policy or talk to your MP. My ex-wife is also unwilling to confirm the number of nights that my child stays with me, and therefore I am having a triple hit on costs. I have sent 2 legal letters including a copy email from her regarding our agreed overnight stays to her lawyer asking for her to simply confirm the overnight stays to the CMS. She has lied to them already and this is a follow up. Our threat is to apply of a court order confirming the agreed stays and to gain a cost order against her. Hopefully she will see sense and respond.
    From a BIK view point I am being hammered as you all are and plan to move to a fully electric vehicle once my current lease expires. I have a year to wait and will really only see the benefit of this in about 3 years due to my CMS assessment being on the 2018/19 year, however, I will have more cash in my hand due to savings on tax. Fully electric cars currently have 0% BIK and even if this rises to 5% over the next 2-3 years its going to be better than my current car.
    Like one of your previous contributors I am seriously considering leaving my job as I am unwilling to pay for someone else’s lifestyle. I lose 25% of my income off the bat to cover the CMS charge which has led me to being unable to re-house myself or my daughter – mortgage payments and the proposed interest rates make renting the only option. I am a higher rate tax payer and earn in excessive of £65K… crazy that I can not survive.

  38. David says:

    HI all,

    What a great supportive and informative group I’ve landed on. I am completely new to world of BIK and company cars so I would really appreciate some advice.

    I recently got a Tesla Model 3 as a company car. It is fully electric and therefore has no carbon emissions. It has 0% BIK for 2019/20, 1% for 2020/21 and 2% for 2021/22. The car itself is worth £50k.

    I earn £58k and gave up an additional £5700 as a cash allowance to opt into the company car.

    What I want to know is, do the CMS base their calculations on the BIK value of the car? E.g. in my case:

    • 2020/21 – £50k car value multiped by BIK rate of 0% – £0
    • 2021/22 50k car value multiped by BIK rate of 1% – it is £500
    • 2022/23 – £50k car value multiped by BIK rate of 2% – £1000


    Do the CMS literally just say my car is worth £50k so are going to add £50k onto my gross salary and work out the percentage from that?

    I’m really worried as I have just got the car, can’t give it back and will have it for another 4 years.


    • Mark C says:

      Hi, I am not an expert on this and it would probably worth checking with your Finance and Wages officer at your company, but my understanding is that its the BIK value as reported by your company on your P60.
      The P60 forms the basis of how the CMS views your income, hence the car BIK being included. So I believe the BIK of say £500 for year 2021/22 is correct.
      Best to check with the company and you could always ask the CMS without revealing your identity.

    • Mike says:

      Hi David
      I believe that they take your taxable income from salary and then add on your BIK. So with a 0% BIK you should make a good saving. Just bear in mind that they only reassess your payments on the annual review date. You can apply mid year if your income reduces by 25% or more – this is a ridiculous value! It should be more like 10%.

      Best wishes.

  39. terry bacon says:

    Hi All
    I have just had a new calculation from CMS which included 30% of my nissan X Trail (£10,500). However I now have a hybrid car which I think if BIK 11% it is a Kia Niro so BIK value (£3000). Can I get them to update my calculation with the new can rather than the old one?

  40. Lee says:

    I also have a company car, and have tried many times to get them to understand that I do not get any payments from it, but it does not stop them from taking the maximum amount of £385 I have a basic wage of 15000 and have kept them informed about all my changes. Should I send in details of all my bills to show them that I cannot afford the amount, and I am now having to ask my father for help, as I physically cannot afford the full amount otherwise. Why is it that it feels that the CSA, do not treat fathers fairly. I also, like others do pay for my child because she is my child, and it’s the right thing to do, and I’m not looking to shirk my responsibilities, but I can’t even spend that amount on my own children that I have and spend time on a daily basis. I just want advice on what to do.

  41. Lee says:

    Hi All,

    Very interesting topic.
    I am about to get a company car and wondered if there was any update on the actual impact on CMS payments? My car will be electric so 0% BIK bracket for this year and 1% next year. Is the value of the car calculated or the BIK tax figure which would be £0 this year and £200 next year?

  42. Andy says:

    Interesting reads in relation to BIK Company Cars. I today, myself had a debate with the CSA in relation to the above. Don’t receive any monetary value towards my car, I have a massively reduced Tax Code to reflect what the Innland Revenue require in order to get additional Tax from me for this benefit. My wage slip stays the same and doesn’t change my take home pay each calender month. I drive a used car, my last one being just under 18 months old and having 16,000 miles yet get taxed on the brand new price of that car (circa £6/£7k difference), so already taking more off me than I’d like in that instance. Feel like I’m getting screwed over in more ways than one. This massively enhanced payment they are now expecting impacts the way of life, not much of one anyway, as it’s mostly work, work, work. It’s not right, they slapped an attachment to my earnings now, even though I produced all my evidence to show I never missed any payments, which is what I was accused of. They had Salary Letter from employers, Bank statements and now paying an extra £40 PCM because they are ‘Forcing’ me down that route. I think they have way too much power. I have asked for them to provide the evidence of such in relation to the BIK, which I will take up with ones local MP. Probably a waste of time but time I have to try something as I believe this is unfair justice for Dads. (BIK wise) When asked if they questioned the other parent as to whether they had received payment, they said ‘No’. Typical !!! With the miles I do, wish an Electric vehicle would be the efficient, cost effective solution for me. Good Luck to all

  43. Griffus007 says:

    Hello, I’ve read all your comments here and i agree generally with the gist of them all. I am having severe problems with the CMS. I paid my ex a lump sum at the start of my maintenance year after i got the revised schedule through. It was for more than £6,000 and this was enough to cover nearly 8 months of payments. SHe says i stopped paying maintenance. I showed CMS the transaction and payment. SHe says it wasn’t maintenance. Of course, i wouldn’t pay her money for anything else but CMS aren’t having it, saying i should have paid monthly. So they started a DEO. After 6 months, i asked this to stop, escalated thiscase with my MP and the DWP (which it is currently sitting with). If the payment is accepted, then i shouldn’t have gone on to a DEO (and not been forced to pay arrears and collection fees). They have agree, after 10 months(!) to change to a Direct Debit for payment which started last month. But… the DEO is still in place and my employer deducts more than £900/month and the Direct Debit collects more than £700 from me each month too. So I am now paying the CMS twice, nearly 60% of my salary, by Direct Debit and DEO…! I’ve spoken to them, the DWP and written to them but these deductions are still ongoing and i cannot do anything about it!

    MY employer is now offering salary sacrifice for Electric vehicles. I want to sacrifice quite a lot to get a decent electric car. The BIK is 2% but i’ve read somewhere about Optional Remuneration Arrangements (OpRA) from APril 2017 where the “foregone” amount (ie the amount you sacrifice) is used for taxable purposes rather than the BIK amount. If i sacrifice £1,000 a month, i am only £310/month worse off after tax/NIC/CMS payments are considered. I will save about £450/month on travel costs so, in effect, i will be about £140/month better off and my CMS liability will reduce by (£12,000×19%=) £2,280/year and i get to drive a new electric car.

    But i cannot find the definitie answer to what i need to know – it seems the BIK value is used (which is fine as 2% for a £75k car would mean only £1,500 BIK) and not the list price or something of the car itself.

    BUT! Under these OpRA rules, it seems to suggest that the “Foregone” sacrifice, in this case £12,000 per annum, is used as the taxable amount becuase it is higher than the BIK.

    DOes anyone know for sure that this is the case?

    ALso – would the CMS see a £1,000 sacrifice as an attempt to divert income? If i put £1,000/month into my pension, it might be seen as (just about) reasonable (based on age and salary).

    I don’t want to sacrifice £1,000/month for a £1,500 BIK electric car only for CMS to turn around and say that i was doing this purely in an attempt to divert incomeand have to pay CMS on the rate as if i hadn’t sacrificed the money. Given that they are happy to be taking 60% of my disposable income at the moment,i’m sure they woudn’t blink twice if they had the chance to do it again in future…

    ANy help of signposting would be very much appreciated, thank you.

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