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Can this cost (or part of it) be put down as a CM business expense? Any advice please.(14 Posts)
I recently had a boundary fence around my back garden completely replaced because the old one was rotting (particularly the wooden fence posts) and in windy/stormy weather you could watch it rocking from side to side in the wind!, it came down in one storm and DH and next door neighbour 'fixed' it. However, we've decided that it was high time to get it professionally replaced with new lap panels and concrete posts all along (a checkatrade listed company carried work out, so I have detailed quote and receipt to show for it). It took 4 men all day to get the work done, the 9ft concrete posts are fixed 3ft down so we still have a 6ft high boundary fence which (I am assured will withstand all winter weather!). It is a fully enclosed garden (no escape exits). The work cost us £800 and I thought we'd just have to take the cost ourselves (as it's essentially a 'family' home), however, my NCMA co-ordinator has suggested that as I childmind at least 30hours a week on average, and the garden is a 'play space' I might be able to claim some of the cost back on expenses. Trouble is I've tried to ring Inland Revenue for help & can't get through to any one for advice! I highlighted the old fence on my risk-assessment and followed up by putting a copy of the quote & receipt for new one in the risk-assess file, to show work done.
I would be inclined to divide the total by the number of folks using your garden (you, DH, YOUR children, the number children on roll) and then multiply by the number of children on roll.
So say you CM 3 children and you have 2 of your own
£800/7 x 3 = £343
Whaddya think? I think that's reasonable
(hope Mr Anchovy sees this, he's FAB at this kind of thing)
I was about to say about Mranchovy LOL. I've always been led to believe that yes we can do a percentage but not sure how that would work due to how many on roll. Having said that, I pretty much always have 6 kiddies here so would be pretty straight forward.
Thanks for the promt feedback , much appreciated. My family constists of : Me, DH and 3 DD's, I have three minded children on books:- 1 x 3year old 20hours per week, and 2 others before & after school Mon to Fri and holiday/inset day cover (when required). Hope this helps make sense.
I would put 50% through as the garden is been used for personal use and business use.
As you already had the fence then the hmrc would say that it was already in use before childminding so you didnt have it done just to be able to work but they would allow a % cost to be claimed as expences I would go with 40% as you could easily justify it.
I am loving that my comp calc is almost the same as 40%, Dan (£320)
made my day, in fact
I put the whole thing through my expenses when I replaced the boundary fence and gate but it was on recommentdation from OFSTED so I concluded that, if they hadn't requested me to do it, it wouldn't have needed to be done.
I checked with the Tax office and they agreed.
My boundary wasn't unsafe: the inspector just wanted it a bit higher.
Whether you can claim this as an expense hinges on whether it is a repair or a replacement.
To be a repair, you must not have replaced the entire fence. It is not clear from your message if that is the case, but in my experience you don't get a lot of fence for £800 so I would assume not.
Also to be a repair, you must not have improved the asset. I would argue in this case that although the new fence has been built more soundly than the old one there has been no improvement in its function or utility, only its durability, but HMRC could well argue against that.
Finally, assuming you believe that the expenditure passes those two tests, only part of the expenditure is allowable, because the house is your home as well as an asset used in the business. The normal method of apportionment of household expenses is based on the number of rooms used exclusively for the business as a proportion of the total number of habitable rooms (living and sleeping rooms not including kitchens, bathrooms, utility rooms etc.).
So if you have three bedrooms, a dining room and living room and use the dining room exclusively for childminding, in general you can claim 20% of your household expenses, so in this case £160.
You could try an argument that the garden is not an anciliary part of the home but performs a special function for the business as a play area and so the normal habitable room apportionment is inappropriate. The fence does fulfil the normal function of marking the boundary of your home, so you can't argue the cost is wholly attributable to the business, but it also fulfils a different function of helping to protect the safety and security of the children. On this basis a 50:50 apportionment seems reasonable, although HMRC may take a different view on an inspection.
There is not usually a black-and-white answer where tax is involved I am afraid!
Thanks for your reply Mranchovy (after the others recommendations I'm glad you saw this post for feedback). Just to clarify, the previous fence was 6ft high and the same length (just down the left had side of the garden, from my house wall down to the 'opposite' neighbour's house IYSWIM, in essense we're talking 4 of 6ftx6ft lap panels and 5 x concrete posts). The other two lengths of fencing, (opposite and right hand side) are still structurally sound being fixed to brick walls on both sides and are other neighbours responsibility. The old wooden fence posts had rotted and were a potential safety & security hazard which is why I've listed it on risk-assessment & replaced with the more durable concrete posts. I hope this helps to clarify the query.
I don't think that there is any more I can say that is going to help you I am afraid.
I should also say that what I have posted on this thread is for information only and does not constitute professional advice (forgot this was on the Childminders topic, other topics I post in have a similar disclaimer at the top of the page).
your advice always appreciated
I have thought about this again - I completely forgot that the business here is childminding.
There is a special concession for childminders who can deduct 10% of their income as an allowance for repairs and renewals. This usually works out better (and is certainly a lot simpler) than claiming a proportion of individual qualifying repairs and capital allowances; you can't of course claim both.
Oh crap, I didn't mean to post that - the repairs and renewals allowance is to cover furnishing and equipment inside your home (carpet, sofa etc..) not fencing. So that point is irrelevant here
I'm having a bad day...
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