For self-employed paying parents, the Child Maintenance Service generally uses relevant taxable business profits rather than total turnover as the starting point. It normally obtains the latest available completed tax-year information from HMRC, applies relevant CMS adjustments and calculates a weekly amount. Dividends and other income sources may require separate consideration.
How Does Child Maintenance Work for Self-Employed Parents?
Self-employed parents generally have the same responsibility to support their qualifying children as employed parents. The main difference is how income is established for the statutory calculation.
Unlike an employee who receives regular payslips, a sole trader or freelancer may have variable income and business expenses. CMS normally relies on taxable profit information supplied to HM Revenue & Customs.
Once CMS establishes relevant gross income, it follows the statutory calculation steps, including eligible pension adjustments, the number of children and overnight care.
Self-employment does not create a separate set of Basic-rate percentages. The ordinary percentages can still apply once relevant income has been established.
Key point: Being self-employed does not automatically mean paying less child maintenance. The relevant business profits and statutory rules determine the calculation.
Does CMS Use Business Turnover or Net Profit?
For an ordinary sole trader assessment, CMS generally uses the relevant taxable profits from self-employment. Business turnover is not the same as taxable profit.
Turnover represents the money earned by a business before allowable costs are deducted. Taxable profit is determined under the relevant tax rules and reported to HMRC.
The total value of sales or business income before business costs are taken into account.
The profit calculated under applicable tax rules, taking relevant deductions into account.
Example: Sole Trader Income
Annual business turnover: £60,000
Illustrative allowable business costs: £23,500
Illustrative taxable profit: £36,500
Weekly equivalent: £36,500 ÷ 365 × 7 = £700
This example assumes the £23,500 is fully allowable under applicable tax rules and that there are no other relevant income adjustments.
CMS does not simply subtract whatever a business owner calls an expense. Relevant taxable profits depend on tax rules, HMRC information and any applicable CMS variation.
How Does CMS Obtain Self-Employed Income from HMRC?
CMS normally requests relevant income information from HMRC. For a self-employed paying parent, this can include profit figures reported through a Self Assessment tax return.
The statutory process generally uses the latest available information from a complete tax year. The tax year runs from 6 April to 5 April.
Consequently, the profit figure used by CMS may relate to an earlier accounting period rather than the income earned in the current month.
What If the Latest Return Is Not Available?
CMS may seek alternative evidence or apply the relevant statutory rules where suitable HMRC income information cannot be obtained.
The correct outcome depends on the information available, current-income evidence and the circumstances of the application.
Can an Accountant Provide Evidence?
An accountant may assist with evidence of the paying parent's taxable income. CMS determines whether the evidence meets the applicable requirements.
Important: CMS will normally tell both parents which tax year was used to establish the income figure.
Child Maintenance Rates for Self-Employed Parents
Once relevant income is established, the general CMS income bands apply to the paying parent.
| Relevant Weekly Income | General Rate | Calculation |
|---|---|---|
| Below £7 | Nil | £0 |
| £7–£100 | Flat | Generally £7 |
| Above £100, below £200 | Reduced | Special formula |
| £200–£800 | Basic | 12%, 16% or 19% |
| Above £800, up to £3,000 | Basic Plus | Two percentage bands |
Basic Rate Percentages
| Qualifying Children | Basic Rate | Above £800 |
|---|---|---|
| One child | 12% | 9% |
| Two children | 16% | 12% |
| Three or more | 19% | 15% |
The rates above describe ordinary income-based cases and do not account for every benefit, shared-care or variation rule.
View Complete Child Maintenance Rates →Self-Employed Child Maintenance Calculation Examples
The following examples use a taxable annual profit of £36,500 and assume the income figure is accepted for the CMS calculation.
They exclude other supported children, additional pension adjustments, variations and overnight care.
Example 1: One Child
Annual taxable profit: £36,500
Relevant weekly income: £700
Basic percentage: 12%
£700 × 12% = £84
Example 2: Two Children
Annual taxable profit: £36,500
Relevant weekly income: £700
Basic percentage: 16%
£700 × 16% = £112
Example 3: Three Children
Annual taxable profit: £36,500
Relevant weekly income: £700
Basic percentage: 19%
£700 × 19% = £133
These figures illustrate how the same business profit can produce different maintenance liabilities depending on the number of qualifying children.
Example: Higher Self-Employed Profits
Relevant gross weekly income: £1,200
Qualifying children: 2
First £800 × 16% = £128
Remaining £400 × 12% = £48
The official CMS result may differ because of verified income, pension treatment, statutory rounding and other adjustments.
What If Self-Employed Income Changes Every Month?
Freelancers, contractors and seasonal business owners may earn different amounts each month. For example, a business could have strong summer profits and much lower winter earnings.
This does not necessarily cause CMS to recalculate maintenance every month. The usual assessment is based on the applicable income evidence and remains in effect until a qualifying change or review occurs.
Can Current Income Replace Historic Tax-Year Income?
Current income may be used where it differs from the historic income figure by at least 25%, subject to evidence and statutory conditions.
For self-employed parents, acceptable evidence may involve a more recent submitted tax return or other information meeting CMS requirements.
CMS applies evidence requirements and may need to establish whether the income change is sufficiently significant and long-term. Parents should contact CMS rather than change existing payments themselves.
Child Maintenance for Limited-Company Directors
A person who owns a limited company does not necessarily have the same taxable income as the total profit recorded by the company.
The company is a separate legal entity, and the director may receive salary, dividends or other benefits.
CMS considers relevant personal income under its statutory calculation rules. Additional income or diverted income may become relevant through a variation.
Relevant taxable employment earnings may form part of the ordinary income assessment.
Relevant dividend income may be considered through the appropriate CMS additional-income variation rules.
Money retained within a company is not automatically equivalent to the director's personal income.
CMS can examine qualifying cases where income may have been diverted to avoid its inclusion in a calculation.
Important distinction: Sole-trader profits, company profits, salary and dividends should not be treated as interchangeable figures in an independent calculation.
Do Dividends, Rental Income and Investments Count?
Some income may not be included in the ordinary CMS income figure but can be considered through an additional-income variation.
This is particularly relevant where a paying parent receives dividends, rental income or investment income alongside employment or business profits.
| Income / Asset Type | General Variation Consideration |
|---|---|
| Dividends and investment interest | Relevant unearned income of at least £2,500 annually |
| Rental income | Relevant unearned income of at least £2,500 annually |
| Qualifying assets | Notional income rules may apply to assets meeting the £31,250 value threshold |
| Diversion of income | CMS may examine qualifying arrangements that divert income from the calculation |
Are Dividends Automatically Included?
Not necessarily. The statutory treatment depends on the income category and whether a qualifying variation is made and accepted.
The CMS can consider evidence from HMRC, Companies House and other relevant sources when deciding a variation application.
Income meeting a stated threshold does not mean a particular increase is guaranteed. CMS assesses the evidence, the applicable category and whether the variation is just and equitable.
Do Pension Contributions Reduce Self-Employed Child Maintenance?
Eligible pension contributions can affect the relevant income used in a maintenance assessment.
For self-employed parents, personal pension payments may be made separately from business accounts. The correct CMS treatment depends on how the contribution was made and whether it has already affected the income figure.
CMS can consider eligible pension payments, including relevant tax relief. A contribution should not be deducted twice.
What About Other Children?
CMS can also adjust income where the paying parent supports other eligible children.
| Other Supported Children | Basic / Basic Plus Income Reduction |
|---|---|
| One | 11% |
| Two | 14% |
| Three or more | 16% |
Reduced-rate cases follow a different approach for other supported children.
Read the Pensions and Child Maintenance Guide →What Is a CMS Variation for a Self-Employed Parent?
A variation is a request for CMS to consider certain income or expenses outside the ordinary calculation.
Either parent may be able to request a variation involving qualifying additional income. A paying parent may request consideration of certain special expenses.
Additional Income Variations
- Relevant rental, dividend or investment income.
- Notional income from qualifying assets.
- Qualifying income where a paying parent receives certain benefits.
- Relevant diversion of income.
Special Expenses
Some qualifying expenses can reduce the relevant income used by CMS. Examples include certain costs of maintaining contact with a child and specified obligations from an earlier relationship.
Ordinary business expenses are not automatically eligible special expenses merely because they are genuine business costs.
Apply through CMS: A variation requires an official request and evidence. The independent calculator on this website does not determine whether a variation will be approved.
Does Shared Care Reduce Payments for Self-Employed Parents?
Qualifying shared care can affect maintenance whether the paying parent is employed or self-employed.
CMS considers relevant overnight stays with the paying parent and applies the statutory reduction rules where eligible.
| Overnight Stays Per Year | General Reduction |
|---|---|
| 0–51 | None |
| 52–103 | 1/7 |
| 104–155 | 2/7 |
| 156–174 | 3/7 |
| 175 or more | 50% plus an additional £7 weekly deduction per qualifying child |
Example: One Child and 52–103 Nights
Starting maintenance: £84 weekly
Applicable shared-care reduction: one-seventh
£84 ÷ 7 = £12
Equal overnight stays do not automatically mean equal day-to-day care. Certain Flat-rate benefit cases and other situations follow separate rules.
Understand Shared Care Rules →What Happens If My Self-Employed Income Falls?
A business can experience unexpected losses, fewer customers or declining profits. However, a fall in turnover does not automatically mean CMS will reduce the maintenance amount.
CMS considers the applicable evidence of relevant income. Current-income reassessment may require a difference of at least 25% from historic income, alongside suitable evidence.
What If the Business Closes?
If self-employment ends, or relevant income changes substantially, the paying parent should contact CMS promptly.
CMS may need details about the business, available income and any benefits.
What If Profits Increase?
A substantial or reportable increase can also affect a maintenance assessment. Reporting obligations depend on the income basis used by CMS.
If CMS has made an official assessment, continue following your payment obligations until an authorised change takes effect. Contact CMS promptly about reportable changes or payment difficulties.
What Records Should Self-Employed Parents Keep?
Accurate financial records can help establish relevant income and support enquiries from CMS.
Parents should keep records appropriate to their business structure and tax obligations.
Submitted returns, tax calculations and supporting HMRC documents.
Profit and loss information, invoices and relevant business accounting records.
Director salary information, dividend records and relevant company documents.
Relevant pension evidence and maintenance payment records.
The exact evidence CMS accepts will depend on the issue being considered and the applicable statutory rules.
How to Estimate Child Maintenance When Self-Employed
To understand a possible maintenance amount, begin with the best available relevant income information and identify whether the case is straightforward or complex.
Determine whether you are a sole trader, freelancer, partnership member or company director.
Use the appropriate taxable profit or personal income evidence.
Review eligible pensions, other supported children and possible variations.
Apply the appropriate income band and number of qualifying children.
Check qualifying shared-care arrangements for each relevant child.
Check whether the circumstances require CMS evidence or a formal assessment.
Calculator limitation: Our homepage calculator may not model dividend variations, retained company profits, disputed taxable income or all special expenses. It should not be used as the sole basis for complex business-income cases.
Official Guidance for Self-Employed Child Maintenance
This page explains general CMS rules in England, Scotland and Wales. Northern Ireland has separately administered CMS arrangements.
For official maintenance assessments, variations and reportable changes, consult the appropriate government service.
- GOV.UK — Detailed CMS Calculation Guide
- GOV.UK — How Child Maintenance Is Worked Out
- GOV.UK — Income and Expense Variations
- GOV.UK — Reporting Changes
- GOV.UK — Official Maintenance Calculator
Independent Information: Child Maintenance Calculator UK is not part of GOV.UK, DWP, HMRC or CMS. Our examples are informational estimates, not official decisions or personalised legal or tax advice.
Review our Calculation Methodology and Editorial Policy for more information about our approach.