Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what guidance his Department gives to the Child Maintenance Service to verify income for self-employed parents and those operating via company structures; and what mechanisms are in place to improve accuracy.

For self-employed paying parents, the gross income used in a maintenance calculation is provided by HM Revenue & Customs (HMRC) in the first instance. HMRC will provide details of the gross taxable profit of the paying parent's business, for the most recent complete tax year

People who are self-employed are required to keep accurate records of their business income and expenses for tax purposes. HMRC can charge penalties for inaccurate reporting where it results in tax being unpaid.

Where a paying parent is the Director of their limited liability company, they are legally an employee of that company and are treated the same as any other employee for child maintenance purposes.

If the receiving parent believes that the paying parent has additional income as a result of their employment status, for example, dividends they can apply for a variation to include this income in the maintenance calculation.

Cases involving complex income can be investigated by the Financial Investigation Unit (FIU). This is a specialist team which can request information from financial institutions to check the accuracy of information the CMS is given. The FIU uses its extensive investigative powers to ensure that families receive child maintenance appropriately and in accordance with the paying parent’s whole income.