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Experienced Childminders: Claiming Expenses if Earn Less than Tax Threshold?

(8 Posts)
mum2ru Sun 14-Jun-09 21:47:50

Hi,

I haven't posted before. In the process of applying to register as a childminder and a bit worried about how much it's all going to cost to start up.

I'm in Scotland and I'm not sure grants are available.

I have two young kids so I have lots of the equipment I need. My main worry is around having to fit fire doors and other equipment to comply with the fire safety regulations.

I know I can claim expenses back from the inland revenue - but what if I don't earn enough to pay tax anyway? Surely that means I can't claim anything back?

I'm not expecting to earn very much as I can only take one pre-school child and up to 3 school-age kids and I'll only be working part-time.

I'm just worried my costs might end up outweighing any earnings I make!

Any advice gratefully received!

KatyMac Sun 14-Jun-09 21:54:12

Fire doors? Is this a strange Scotland thing?

Anyway you don't claim expenses back from the IR/HMRC

You earn money Say £10,000 - which would mean you would pay tax

10,000-6470=3530
3530*20%(tax)=706

Tax=706

But if you have 2000 expenses then

10,000-2,000=8,000
8,000-6470=1530
1530*20%(tax)=306

Tax=306

(BTW NI confuses things)

You don't need fire doors you will need mains smoke alarms fitted though.

I didn't get any grants but not sure if that's the same across all of Scotland sorry.

If you get in contact with your local SCMA DO ( you should be able to do this through www.childminding.org) they'll let you know all you need to know.

Re tax - ^^ what Katy said.

atworknotworking Mon 15-Jun-09 07:18:30

I would imagine that if you have 2 LO your home will be pretty child proof already.
You will need the usual kind of things like safety gates, socket cover, cupboard locks, a fire blanket in the kitchen and of course smoke alarms we don't have to have mains fitted where we are (not Scotland) so don't know if this is specific to your area, the local fire service fitted mine FREE which was nice, got to see a lovely fire engine too grin You will need an evacuation route clearly planned out and displayed which you practice with the children regularly. You don't need fire doors but if you have glass panneled doors they need to be kite marked and safety glass (the ofsted inspector will check this on first visit) although I have glass pannells in the top of my doors which isn't a problem. I have fire extinguishers fitted in the play rooms but it's not compulsary. If you go to your local sure start centre and speak to one of the Early Years Proffessionals they will be happy to give you some advice, my local Families Information Service popped out before I reg'd and had a look around which was lovely and gave me some pointers too.

For tax just as KatyMac said, with regard to NI I have a monthly debit it's about £10 per month, and then when I do tax return I pay some more sad but it doesn't always work like that, depends how much you earn etc. Is this the first time you have been Self Emp? if it is then I would see your local business team they will give you some advice.

With regard to grants their isn't any, but some sure starts do have a loan scheme where you can borrow equipment like high chairs, travel cots, safety gates etc so your local sure start will tell you if they have one in your area.

mum2ru Mon 15-Jun-09 14:30:36

Thanks everyone for your replies,

I thought fire doors seemed a bit much but the Fire Precautions Guide I've been sent out with my application seems to say you need "fire-resisting doors and walls" (have to be fire-resisting for at least 20 mins) if you use any upstairs room for childminding. My husband and I have both read it through several times and it's very unclear.

I had thought I might need to use one of my bedrooms for a child who still needs to nap. Anyway, I'm getting the fire brigade out to do a check so all should hopefully become clear then.

Still not clear about the tax and expenses situation. I get it that you take your expenses off your earnings which then reduces your taxable income. However, I think I might only earn 5000 or so. Therefore I wouldn't be paying tax so I'd have nothing to offset my expenses against, surely?

Am waiting on SCMA getting back to me. They co-wrote the fire precautions so they should be able to clear it up.

KatyMac Mon 15-Jun-09 14:56:42

So you would offset it against future years income

Plus you can take any loss off your tax credit liability

So I made a £10K loss so for Tax credits our joint income was DH's income less my income - so we got lots of tax credits

atworknotworking Mon 15-Jun-09 16:51:39

If you start childminding you will be required to submit an annual tax return, this will require you to complete accounts for your trading period, in with this will be your Turnover (all monies recieved by business) less Overheads (allowable expenses) which will give you your net profit figure, so you will still have to work out your expenses etc and keep all reciepts to reference with your tax return, if your annual income is less than 15K you will need to complete a short tax return if over 15k you will need to complete the long version (your tax office will advise you when you reg as self emp). So even if you t/over less than your taxable limit you would still take exps off that.

As KM says even if you make a loss you can offset it against future years, which could help as CM is pretty unpredictable at times and income goes up and down quite often.

I'll dig out my fire guidance later and check it, as far as I recall it's something to do with overnight caring.

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