This Is Financial Abuse — And It’s Legalised Through Loopholes

Deanna Newell
Aug 10
2 min read

When Corporate Tax Tricks Become Tools of Domestic Abuse

Imagine this.

A parent — is the sole director and shareholder of a limited company. They pay themself a token salary of £12,570 a year — just under the tax-free threshold.

On paper, they are barely scraping by. But in reality?

They have just bought a house.
They are enjoying holidays abroad.
They drive a decent car
They regularly eat out, live well, and never seems to worry about bills.

And how much do they contribute to their children’s lives?

Many parents do not even pay enough each month to cover a single week’s grocery bill — let alone clothes, education, or specialist needs.

The Legal Loophole

Thanks to Child Maintenance Service (CMS) rules, payments are calculated based on taxable income reported to HMRC.

So what happens?

Many self-employed or company-director parents exploit this system by:-

Minimising their declared salary
Delaying or avoiding dividend payments
Claiming expenses and perks through their company
Leaving profits in business accounts — untouched, but still theirs

The result?

They look poor on paper but live comfortably — even luxuriously — in practice.

This Isn’t a Loophole. It’s Financial Abuse.

This is not clever accounting.

It’s economic coercion — a recognised form of post-separation abuse.

It’s about control.

It’s about punishment.

It’s about power.

These parents deliberately deprive the other parent (almost always the mother) and their children of essential support — knowing full well that:-

The system is slow, under-resourced, and easy to manipulate
The other parent will carry the burden alone
The children will suffer, and yet the abuser won’t be held accountable

And yet "the system" enables this.

The Impact on Mothers and Children

Mothers are left to stretch every penny — often while managing children with disabilities, trauma, or additional needs.
Children miss out on basic rights — therapy, school trips, warm clothes, even heating or food.
Long-term consequences include poverty, burnout, and entrenched gender inequality.

When a parent deliberately under-declares income while living a high-consumption lifestyle, it’s not just unfair —it’s abuse.

It’s using the legal system as a weapon — to punish one parent, and neglect the other.

We Need Urgent Reform

It is time to:-

Give CMS the power to investigate lifestyle vs declared income
Let courts impute income based on company assets and access
Close the loopholes allowing directors to hide money while their children go without
Recognise this for what it is: domestic abuse by financial means

What You Can Do

If you’re affected — you are not alone. Speak up.
Apply for a CMS variation — citing “diversion of income”
Consider court action under Schedule 1 of the Children Act — ask for full disclosure of company assets and spending
Join the movement for reform. Share your story. Demand better.

This isn’t a niche issue.

It’s widespread.

It’s deliberate.

And it’s devastating.

Deanna Newell Family Law

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