Close the Loopholes: Children Should Not Pay the Price for Accounting Structures

Deanna Newell
Mar 3
2 min read

The problem

Children are going without heating.

Children are moving between temporary housing.

Children are watching one parent struggle to survive.

Meanwhile, the other parent declares a low income, while controlling assets, company profits, or retained earnings.

This is not rare.

This is structural.

The Reality

Nearly 1 in 4 children in the UK live in poverty (Source: Child Poverty Action Group).

Over 1 million children rely on the Child Maintenance Service (CMS) for financial support (Source: Department for Work and Pensions) and yet the system assesses primarily taxable income, not always true financial capacity.

For PAYE employees, income is transparent.

However, for some self-employed parents, sole traders, or majority shareholders, income can be structured:

Retained in a company
Paid as dividends
Offset through expenses
Deferred
Minimized on paper

Legal? Often, yes.

Fair to children? Not always.

When “Low Income” Isn’t Poverty

A parent may:

Live mortgage-free
Control company profits
Draw minimal salary
Retain significant assets

And yet child maintenance is calculated on what is formally declared to HMRC.

This creates a gap between:

Declared income ..

.. and

.. financial power

That gap is where children fall.

This Is Also a Domestic Abuse Issue

Economic abuse is legally recognised under the Domestic Abuse Act 2021.

Economic abuse includes:

Controlling access to money
Restricting financial independence
Withholding resources

When maintenance loopholes are exploited deliberately, the effect is economic abuse:

Housing instability
Long-term insecurity
Ongoing post-separation control

Children experience that instability directly.

The Inequality Built Into the System

The Child Maintenance Service, overseen by the Department for Work and Pensions, calculates payments primarily using income declared to HMRC.

However whilst PAYE income is fully visible to HMRC:=

Company structures can create flexibility.
Asset wealth is not automatically reflected.
Divorce settlements are not consistently factored into capacity assessments.

The result?

Two children with parents of similar financial capacity can receive very different levels of support.

That is not child-centred policy.

This Is Not About Punishing Business Owners

Many self-employed parents pay properly and transparently.

This campaign is not anti-business.

It is pro-child.

We are calling for:-

Greater financial transparency where discrepancies arise
Automatic review triggers when assets do not match declared income
Consideration of retained profits in certain circumstances
Stronger enforcement against deliberate income suppression

Because maintenance should reflect real capacity to provide.

The Principle Is Simple

Children should not experience poverty because income has been rearranged on paper.

Children should not lose housing stability while assets are protected elsewhere.

Children should not carry the burden of structural loopholes.

Reform is not radical.

It is responsible.

Deanna Newell Family Law

Advocacy for truth-tellers, survivors, and the children who deserve better