Annual Review Predictor
Find out whether an income change will trigger a new CMS calculation, and what it means for you in plain English.
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How the 25% rule works
The CMS only recalculates maintenance between annual reviews if income changes by 25% or more. Below that threshold, no change is made until the next scheduled review. Even if your income has changed significantly.
Enter your details to see your review prediction.
What the annual review is, and what it is not
Every CMS case has a review date. Once a year the CMS pulls the paying parent's gross taxable income from HMRC for the latest available tax year, reruns the calculation and applies the result from that review date. A letter lands roughly 30 days before it takes effect.
It is an automatic process, not a decision someone sat down and made about your family. Nobody reviewed your circumstances. A figure was requested, a formula was applied, and a letter was generated. Knowing that changes how you respond, because arguing with the review is pointless. Arguing with the numbers inside it is not.
The lag nobody warns you about
HMRC income data is historic by design. Tax years close, returns are filed, records settle. By the time the CMS reads a figure, the year it covers has usually finished. So the annual review often applies income from a period that has already ended.
For a paying parent whose earnings have fallen, that is brutal. You can be assessed on a bonus year, a period of overtime, or a contract that ended months ago. The assessment is correct according to the data and wrong according to your bank account at the same time.
The 25% rule, and where it comes from
Between annual reviews the CMS will only recalculate if gross income has moved by 25% or more. That threshold sits in the Child Support Maintenance Calculation Regulations 2012, at regulation 17 and regulation 34. It applies in both directions, so a large rise triggers a new calculation just as a large fall does.
The consequence is easy to state and hard to accept. A 24% pay cut changes nothing. You carry it until the next review date. Use the tool above to see which side of the line you fall on, and the income change checker if you want to test several figures against the threshold.
How the new figure is built
The calculation runs through bands. Which band the gross weekly income falls into decides everything else.
| Band | Gross weekly income | What happens |
|---|---|---|
| Nil rate | Under £7 | Nothing payable |
| Flat rate | £7 to £100 | £7 a week flat |
| Reduced rate | £100.01 to £199.99 | Tapered figure above the flat rate |
| Basic rate | £200 to £800 | 12% for 1 child, 16% for 2, 19% for 3 or more |
| Basic plus | £800.01 to £3,000 | Basic rate on the first £800, then 9%, 12% or 15% on the excess |
Gross weekly income above £3,000 is ignored, so the calculation stops there no matter how much is earned beyond it.
A worked example
A paying parent moves from £600 to £900 gross a week, with two qualifying children. That is a 50% rise, comfortably over the threshold, so a mid-year recalculation is available rather than waiting for the review date.
- Old figure: 16% of £600 equals £96 a week.
- New figure: 16% of the first £800 equals £128, plus 12% of the £100 excess equals £12.
- Total: £140 a week, a rise of £44.
Run your own numbers through the full maintenance calculator to see the same working applied to your case.
Two adjustments that are often missed
Other children living with the paying parent reduce gross income before the percentage is applied: 11% for one, 14% for two, 16% for three or more. This is applied first, so it shrinks the base that everything else is worked from.
Shared care is applied afterwards, in bands measured in nights per year. From 52 to 103 nights removes a seventh. From 104 to 155 removes two sevenths. From 156 to 174 removes three sevenths. At 175 or more the liability halves and a further £7 per child per week comes off.
Neither adjustment updates itself. A new baby in the household or a changed contact pattern needs reporting in writing. Annual reviews recalculate income reliably. They do not audit your living arrangements.
Finding your review date
Your review date is fixed when the case starts and it does not move year to year. It is printed on your annual review letter and on the calculation letters that follow it. If you cannot find either, ask the CMS in writing to confirm it.
Knowing the date matters for timing. A change reported shortly before the review will often be swallowed by the review itself. A change reported straight after it has to clear the 25% threshold on its own or it waits nearly twelve months. Parents who report an income drop casually, without checking the date or the threshold, frequently get a letter back saying no change will be made and assume the CMS ignored them. It did not ignore them. The rule simply did not let it act.
Reporting a change so it counts
Reporting an income change is not a conversation. Treat it as a submission. The CMS needs enough to identify the case, enough to see the size of the change, and evidence that supports it.
- Case reference number and the date of the change.
- Old gross annual income and new gross annual income, stated as figures.
- The percentage change worked out, so nobody has to do it for you.
- Evidence: payslips, a redundancy letter, a new contract, or accounts if self employed.
- A clear request that the case be recalculated under the 25% rule.
Send it in writing and keep a copy. Phone calls leave a note on a system you cannot see. Letters and emails leave a record you can quote later, which is exactly what you need if the change is missed and you end up arguing about dates months down the line.
Self employed and company income
The HMRC feed handles PAYE well and everything else less well. For a director drawing a small salary and taking the rest as dividends, the gross taxable figure the CMS receives can be a fraction of the money actually reaching the household. That is not fraud in itself. It is a structure the tax system permits and the child maintenance formula struggles with.
Receiving parents in that position should not spend energy disputing the arithmetic, because the arithmetic will be right. The argument is about which income should have gone into it. That is a variation request, backed by filed accounts, dividend records and anything showing money moving out of the company.
What to do when the letter arrives
- Check the income figure and the tax year it relates to. Compare it with your P60.
- Check the number of qualifying children and any other children in your household.
- Check the shared care nights recorded against your actual pattern.
- Check the band and rerun the percentage yourself. The arithmetic is simple enough to verify.
- If it is wrong, act inside one calendar month. That window is short and it is strict.
Receiving parents should read the letter with the same care. An unexpectedly low figure usually means either an income drop the CMS accepted, or income the HMRC feed never captured. Dividends, retained company profit and rental income are common blind spots, and the variation checker covers the grounds for asking the CMS to look further.
Challenging the figure
You cannot object to the review happening. You can challenge the decision it produced. Request a mandatory reconsideration within one calendar month of the decision date. That step is compulsory before any appeal to the First-tier Tribunal. Miss it and the reconsideration will usually be refused as out of time.
Keep the request narrow. State the figure you say is wrong, state the correct figure, and attach the evidence. Broad complaints about fairness get filed. Specific factual corrections get actioned. The mandatory reconsideration tool puts the request into that shape.
Where the paying parent supplied wrong income information, the CMS can revise the decision back to the original effective date. That is one of the few situations that produces genuine backdated liability, and the backdate calculator shows what the corrected period is worth.
Where the official position is contested
The 25% threshold is defended as a way to keep cases stable and avoid constant recalculation. The criticism is straightforward: a 24% income drop is a serious event in any household, and being told it does not count until a date months away is hard to justify to the parent living it. That argument has been made repeatedly and the threshold has not moved.
The HMRC lag draws similar criticism. Assessing a parent on a tax year that has already closed produces figures that are accurate on paper and detached from reality. The CMS treats the HMRC figure as the starting point, and the burden of showing it is out of date sits with the parent.
None of that makes the rules optional. It does mean the annual review is worth checking line by line every year rather than filing the letter unread. If your case is on Collect and Pay, the fee calculator shows how the review also changes what each household actually pays and receives once the collection charges are applied.
Common questions
What actually happens at a CMS annual review?
The CMS reviews every case once a year on its review date. It pulls fresh gross taxable income for the paying parent from HMRC for the latest available tax year, reruns the calculation, and applies the new figure from the review date. A letter arrives roughly 30 days beforehand telling you what the new amount will be, so you get warning rather than a surprise deduction.
Why is the CMS using income I do not earn any more?
HMRC data lags behind real earnings. The annual review usually applies figures from a tax year that has already finished, so a parent whose income dropped after that year can be assessed on money they no longer receive. It is not an error in your case. It is how the data feed works. The fix is to report the current income and see whether it clears the 25% threshold.
How does the 25% rule work between reviews?
Outside the annual review the CMS will only recalculate if gross income has moved by 25% or more, up or down. The threshold sits in the Child Support Maintenance Calculation Regulations 2012, at regulation 17 and regulation 34. A 20% pay cut therefore changes nothing until the next review date. That feels unjust to a lot of parents, but it is the rule as written.
Can I stop an annual review increase from going ahead?
Not by objecting to the review itself. The review is a routine step, not a discretionary decision. What you can challenge is the income figure used, if it is wrong or out of date, or the calculation itself if a factor such as other children or shared care has been missed. Do that through mandatory reconsideration within one calendar month of the decision.
Do shared care nights get rechecked at the annual review?
They should be, but only if the CMS knows about them. Shared care is applied in bands: 52 to 103 nights a year removes a seventh of the liability, 104 to 155 removes two sevenths, 156 to 174 removes three sevenths, and 175 or more halves it and takes a further £7 per child per week. If your pattern has changed, report it in writing rather than assuming the review picks it up.
What if the paying parent's real income is far higher than the HMRC figure?
Report it and ask for a variation. Dividends, retained profit inside a limited company, rental income and other unearned income are not always captured in the gross taxable figure the CMS pulls. A variation asks the CMS to look beyond that figure. If wrong information was given, the CMS can also revise the decision back to the original effective date, which creates backdated liability.