Self employed and 30 hours childcare

Sorry to jump on this thread! Does anyone know if the minimum earnings are based on sales or profit?

I've already used my 12 month grace period and my sales are up and down depending on the season. I have no idea yet what my profit will be in 12 months time as I'm constantly buying new stock and reinvesting into the business. My sales are definitely over the minimum amount, but I'd say my profit probably isn't purely because all my money is put straight back into the business.

It's impossible to get through to HMRC on the phone so any advice would be much appreciated!

That's what I thought but just seems to good to be true! 🙂 xx

From what I understand it's because self employed business don't have the minimum threshold requirement for first 12 months

Thanks all.

I still don't understand how you can be registered as self employed, earn less than the income of £8,668.00 and qualify for the 15 hours by just giving your word? Yiu could also not pay tax only NI if you earn uder tax threshold. Am I missing something?! Xx

Note also that the eligibility may be based on profit rather than total earnings, so you may need to make £200 profit. Maybe worth a call to HMRC to check?

I don’t think there’s a minimum requirement to register as self-employed with HMRC. And if you’re making things with the intention of selling them for a profit that would be a business regardless of profit, so I think you’d need to register anyway (even if your total earnings between your jobs are low enough that you don’t have to pay tax on it).

Does anyone know if you can still set up a new business as a sole trader if you expect to earn less than £1000 a year?

I earn around £200 under the threshold to qualify for the 30 hour funding for 2 year olds and can’t increase my hours in my main job 🤦🏻‍♀️ I don’t really have time to run a business or work elsewhere, but was wondering if it would be possible to set up as a sole trader and make a few crafts to sell to family and friends, purely to make up the extra £200 needed to qualify for the hours.
Thanks

so it sounds like you need to incorporate first (to qualify as self employed) and then apply for the hours yep? so for september start date incorporate by June-July when you apply? any advice on what entity (ltd, sole trader, something else) for someone who wants to offer services like photography (ie no major expenses to offset income). thanks!

Yes they are separate.

Am I right then thinking you have a childcare account which you open if government agree you qualify for 15 hours and give you code. This is the account you update to confirm your circumstances havent changed every 3 months. You then have your account which you register as self employed and update earnings, do tax return on etc? Both accounts are therefore separate? xx

@punjama sounds very much like fraud...

The 12 months will be from start of incorporation, as there’s no way for HMRC to tell when your hours started. I don’t know about closing a business and starting a new one. It’s probably best to speak to a financial advisor or someone at HMRC about that.

Yes, you will need to apply for a childcare account. You can use your government gateway login to do this (you will have got/will get the login ID when you register as self-employed): https://childcare-support.tax.service.gov.uk/par/app/trialmessage

I just confirmed I was still entitled every 3 months. The previous circumstance were highlighted and I ticked to say there was no changes. I used government gateway to update.

Thank you for reply. So technically just register and done essentially. Do you know when the 12 months start being counted from? From date of incorporation or start of hours? Anything stopping someone closing first business down and opening second new one for new line of work / contracting? Many thanks!

I don't currently get help with childcare costs so I don't have a childcare account. Is this something you have to do when applying for the 15 free hours?

Sorry for all questions am just finding it very confusing xx

Many thanks. Where is the childcare account? Where can I find this to update it every 3 months? Xx

You register your yearly earnings once a year, when you fill out your SA tax form in April at the end of the tax year. (You actually have until the following January to do your tax form, but I personally find it easier to do it right away.)

In your childcare account you just reconfirm every three months that you’re still eligible – no extra checks of earnings on this side.

DragonFly98 do you know how the self employment side works? Do you have to let them know how much you plan on earning every 3 months? If so do you do this on HMRC website? Xxx

I assume you are talking about the new 15 hours for working parents of two year olds. If so yes that will be treated the same way as the 30 hour entitlement for self employed people. You don't need to meet the earnings threshold for the first 12 months after registering as self employed.

I am in a similar situation. My partner is self employed and only recently started. How does the 15 hours with self employment work? There isn't much help about this out there! Do you have to submit your earnings every 3 months so they can check you are earning? I no you don't do tax return until later in the year so its all confusing!

Xxxx

Hi sorry to bump old thread but does anyone know if same works for 15 hours?
Husband works full time, I've been stay at home mum for several years (first kid 5, second 1.5).
If I register my own business (eg photographer) then even if I don't earn anything we'd be eligible for the 15 hours for when our kid is 2 (term after birthday)

@Emilyplays84 No, there's no minimum threshold for the first 12 months of business:

"If you’re self-employed and started your business less than 12 months ago, you can earn less and still be eligible for 30 hours free childcare."

www.gov.uk/30-hours-free-childcare

I'd expect you'd have to be working and registered with HMRC before you can apply for the free hours though (or starting work the day your child starts).

@Cupcakegirl13 jumping on this thread as I had a similar question. Just wondered if there is any threshold you have to meet during that first 12 months? I'm thinking of starting an Etsy business soon and obviously don't know if it'll be a success

Also there is a grace period so that if circumstances change you get a few weeks leeway, it won’t suddenly stop overnight.