Navy's handholding thread: Never done a tax return before! EEEKK

Grrrr... am annoyed if that is the case, as I was told otherwise and did my tax claim accordingly. :(

I wish it wasn't so complicated and that it was easier to get clear guidance!

leeloo that is not correct. As long as you only use part of your home part of the time for childminding, you do not lose your Principal Private Residence Relief. Make sure your family uses all rooms used for childminding in the evenings and/or weekends.

hurrah that you've done it

well done young laydee x x x

Navy - probably too late now, but if you claim mortgage as an expense then when you sell your house you have to pay tax on it (capital gains?) its something about your house effectively becoming a business asset which you then have to pay tax on when you liquidate the asset. Thats why CMers are advised only to put rent down as an expense not their mortgage. :(

On a happier note, I was employed and self-employed last year, made a loss on the CMing and got a healthy tax rebate on what I'd paid as an employee. :) Hope you do too!

Basic rate tax is gross pay x 0.2, not net pay x 0.2, so to get from net pay to tax you have to multiply by 1 / ( 1 - 0.2 ) = 1.25

Did you get a P45 from your job?

My DH was both employed and self employed. Ticked the relevent boxes at the beginning of the form (yes he was employed and yes he was self employed). On the employment form, it was his figures from his P45 and self employed (CM) was just income and expenses figures. Once I submitted it, a neat little tax calculation came back to me.

MrAnchovy - Thanks for the mortgage interest advice. Fortunatly I had enough expenses this year to not have to pay tax, but i'll certainly be using it next year!

mr anchovy - how would mine work? i DO claim the 33 percent light and heating as i work over 40+ hours.
i have a 3/4 bedroom semi, i use two reception rooms downstairs for 8 hours monday to friday for minding.....kitchen to but obviously we feed them lol.....how would i (if daring to go down that route) work out how much i could put through.

Goodness me I'm so glad I used an accountant!

I used the company www.onlychildminding....
They were fab and only charged £72 and that was deducted as an expense.
They gave me a really easy to understand set of insructions and for the last two years have sorted it all for me
Simple!

I can't give you specific advice because I don't know all of the facts, but I would say that if you are using two of those rooms for private purposes during the week it is not reasonable to claim all of the costs for them. So if you used 3 rooms jsut for childminding in the week and 2 rooms for 8 hours childminding and 4 hours in the evening thats

3 x ( 1 / 8 ) + 2 x ( 1 / 8 ) x ( 8 / 12 ) = 54% use Mon-Fri. x the lot by 5/7 gives 38%.

Having said that I would be inclined to drop the downstairs toilet and any bathrooms out of the equation as these are only used incidentally.

So perhaps the calculation looks like:

2 x ( 1 / 6 ) + 2 x ( 1 / 6 ) x ( 8 / 12 ) = 56% use Mon-Fri. x the lot by 5/7 gives 39%.

That doesn't make a lot of difference, which is good because it shows that you haven't deliberately chosen a particular method jsut because it comes out with a more favourable result than other reasonable methods.

Yes looneytune and canary, I know that the NCMA tells childminders that, based on some confusing information they have been given by HMRC.

But all self employed people are entitled to claim an appropriate proportion of mortgage interest as detailed in the HMRC guidance here and here.

Same here. I was always told those with mortgages had to like it of lump it. Was only complaining to FiL yesterday about how unfair it was.

I didn't know we could claim interest from our mortgage? I was always told it was just rent if we rented?!

1. That makes it difficult! Actually your method will always result in an underestimate so it will do. A closer estimate would be the amount outstanding on the mortgage x the APR.

1. Don't you use any of those rooms in the evening?

1. Well that's not very helpful of them :(

Mr A, as ever, I salute you

1. No, that's not right. You should receive an annual statement from the mortgage company which says how much interest has been added to your mortgage and how much you have paid off, you need to add up the monthly interest figures for the relevant months.

1. 5/8 of your house for 5/7 of the week sounds like a lot to me - what are the 5 rooms that you only use on weekends? Assuming that you can justify these figures, the calclation is correct.

1. Ordinarily I would say phone HMRC and ask about this one, but given the amount of time available I would say put in the amount you received x 1.25 as gross pay and 20% of that amount as tax deducted. Explain what you have done and why in the 'white box' for extra information.

NEL I don't know the answers but sending you ''keep buggering on'' vibes, hoping someone will be along to help you

x x x x x

Well if you made a profit of £200 next year you wouldn't have to pay any tax because it is below the £7,475 personal allowance and £7,225 Class 4 NI threshold that apply next year.

But if you made a profit of £8,000 next year then yes, you can use the loss to reduce this. But what is probably best, is if you use the £100 (or whatever) loss to reduce your income for 2009/10 for income tax purposes so you get a refund and use the same loss to reduce your income for 2010/11 for Class 4 NI purposes.

All this assumes your previous employer was actually operating PAYE - did you get any payslips? Yes HMRC should have a record of the amounts, call them and explain the situation although they are quite busy at this time of year (!)