Company directors and entrepreneurs are artificially reducing their earnings by paying themselves in dividends to cut their maintenance payments to ex-spouses, MPs say today.

They urged ministers to tackle "shameless self-employed" parents who exploit a legal loophole that allows them to avoid paying the right amount of child support to their former families.

A high proportion of cases slipped through the cracks when the new child support system was introduced in 2012, a report from the House of Commons Work and Pensions select committee found.

A decision to calculate maintenance payments on gross income meant that the self-employed who received income in dividends or rents were not included.

The committee said: “We heard that self-employed people and company directors were able to deploy techniques significantly to lower income declared to HMRC or hide assets using their company accounts in order to minimise their maintenance liability.”

One MP told the committee that “her former partner had been a director of his own companies and had used his position to disguise his income through directors’ loans and expense claims”.

However, since 2012 parents in charge of children have lost the right to challenge former partners whose lifestyle is inconsistent with their declared income.