Does the CMS use my turnover or my profit?

Profit. The CMS uses your net profit from self-employment as declared on your Self Assessment return. Turnover (your total income before expenses) is not used. Legitimate business expenses already claimed through HMRC reduce the figure the CMS works from.

Can I reduce my child maintenance by claiming more expenses?

Legitimate business expenses that HMRC allows will reduce your declared profit, which reduces the CMS figure. However, claiming expenses that are not genuinely incurred for business purposes is tax fraud, not a maintenance reduction strategy. The CMS can also apply for a variation if they believe your lifestyle is inconsistent with your declared income.

What if my income has dropped significantly since my last tax return?

You can apply for an unscheduled review if your income has dropped by 25% or more since the figure the CMS is currently using. You will need to provide evidence - updated accounts, bank statements, or a projection from your accountant. The CMS will still need to verify the change against HMRC records once your next return is filed.

I've just become self-employed - what income will the CMS use?

If there is no HMRC Self Assessment data available yet, the CMS may ask you to provide evidence of your income, or may use a notional figure based on the National Living Wage for full-time work. Once your first Self Assessment return is filed and processed, the CMS will update the calculation.

Can the receiving parent challenge my declared income?

Yes. The receiving parent can apply for a variation on the grounds that your income is higher than the figure the CMS is using - for example, if they believe you are understating profits or have other income sources not on your tax return. The CMS will investigate and may request additional information from you and HMRC.

Child Maintenance If You're Self-Employed: How the CMS Calculates Your Payments

How the CMS treats self-employed income

If you are self-employed, the Child Maintenance Service calculates your payments using your gross taxable profit as reported to HMRC through Self Assessment - not your turnover, not what you drew out as drawings, and not what is sitting in your business bank account.

The CMS obtains this figure directly from HMRC under data-sharing powers introduced by the Child Maintenance and Other Payments Act 2008. You do not provide the figure yourself - the CMS goes to HMRC for it. This means you cannot simply tell the CMS a different number: they will check it against your tax return.

What income the CMS uses

For a sole trader or a partner in a partnership, the CMS uses:

Net profit from self-employment as declared on your Self Assessment return (SA100 or SA103)
Any other taxable income you receive - rental income, employed earnings from a second job, interest income above the personal savings allowance

The CMS adds all of these together to arrive at your total gross annual income, then divides by 52 to get a gross weekly figure. The standard CMS rate bands are then applied to that gross weekly figure.

What expenses are allowed

Because the CMS uses your net profit after allowable business expenses, legitimate business costs are already deducted before the CMS sees your income figure. If you have correctly claimed allowable expenses through HMRC - tools, materials, a proportion of home office costs, vehicle mileage, professional subscriptions - these reduce the profit figure the CMS works from.

The CMS does not separately review your expense claims. They use the profit figure HMRC has accepted. This is one reason why keeping accurate and complete business records, and filing a thorough Self Assessment return, matters if you are self-employed and paying child maintenance.

Important: The CMS can apply for a variation if they believe your lifestyle is inconsistent with your declared income, or if you have assets that generate income not showing on your tax return. If you are deliberately keeping declared profits low to reduce maintenance, the receiving parent can apply for a variation and the CMS can look behind the Self Assessment figure.

Which tax year does the CMS use?

The CMS uses the most recent tax year for which HMRC has finalised figures. Self Assessment returns are not due until 31 January following the end of the tax year (5 April), so there will often be a lag:

If your maintenance case starts in, say, October 2025, the CMS may be using your 2023/24 figures because your 2025/26 return is not yet filed or processed.
Once the CMS has a figure from HMRC, payments are set at that rate until the next annual review.
If your income changes significantly, you or the receiving parent can apply for an unscheduled review - but the CMS will still need an updated HMRC figure to act on.

What if my income varies year to year?

Self-employed income can be unpredictable. A good year can be followed by a difficult one, and the CMS figure may not reflect your current situation. Your options are:

Annual review: The CMS automatically reviews your payments every 12 months. The review will pick up the new HMRC figure once it is available.
Apply for an unscheduled review: If your income has dropped by 25% or more, you can ask the CMS to recalculate before the annual review. You will need to demonstrate the change - usually through updated accounts or a projection from your accountant.
Appeal to the First-tier Tribunal: If you disagree with the figure the CMS has used, you can challenge the calculation through the independent tribunal process after first requesting a Mandatory Reconsideration.

What if I have not filed a Self Assessment return?

If HMRC has no record of your income - because you have not yet filed, or because you have only recently become self-employed - the CMS cannot obtain a verified figure from HMRC. In this situation the CMS may:

Ask you to provide evidence of your income (bank statements, invoices, accounts)
Use a notional income figure based on National Living Wage if no reliable evidence is available
Set a provisional figure pending the HMRC data becoming available

Failing to register for Self Assessment when you are required to, or failing to file on time, does not reduce your child maintenance liability - the CMS will find a basis for a calculation regardless.

Universal Credit and self-employment

If you receive Universal Credit, the Department for Work and Pensions applies a Minimum Income Floor (MIF) based on what a person working equivalent hours would earn. The CMS calculation is separate from Universal Credit and uses HMRC figures, not the UC MIF. However, if your declared profit is very low, the CMS may question whether it reflects your true income.

Can I use a private arrangement instead?

Yes. If both parents agree, you can make a private family-based arrangement without CMS involvement. Our net pay calculator can help you work out a fair figure based on your take-home pay. A private arrangement can be formalised through a solicitor as a Consent Order to make it legally enforceable.

Key differences from employed income

Employed	Self-employed
CMS uses gross salary from PAYE records	CMS uses net profit from Self Assessment
Income is predictable and verified in real time via RTI	Income is verified annually via Self Assessment
Employer deducts tax and NI before payment	You declare and pay tax via Self Assessment
Limited ability to reduce declared income	Legitimate expenses reduce the profit figure the CMS sees
No lag - current year data usually available	Often a 12-18 month lag between earning and CMS figure