navyeyelasH you are right about the personal allowances and the mess over the 10% tax band, but I think there is quite a lot of confusing information on this thread so I thought I would dive in and clarify a few things.
The personal allowance in 2007/8 was £5,225. This is the same whether you are single or married, unless you are over 73 .
The personal allowance in 2008/9 was going to be £5,435 so people with a 'standard' tax code now have 543L.
Due to the 10% tax band cock-up, the personal allowance in 2008/9 is being increased to £6,035. So in September your tax code should change to 603L.
If you have a job with benefits in kind (company car, BUPA, some types of pension scheme), or you have tax under or overpaid from previous years then your tax code might be very different from this. This is because HMRC use the tax code to collect tax from you (or give some back if necessary) on these benefits. But because this can only be done on an estimated basis, you will probably do a tax return at the end of the year to sort everything out.
The tax code is used only by employers to work out how much tax to hold back from your pay (and later hand over to HMRC), so it doesn't have any effect on your CM affairs (although the personal allowance on which it is based does of course, as you will see below).
Now for the difficult bit...
KatyMac I think you have confused things a little by taking the personal allowance off your total income and then taking off your expenses. How it actually works is this:
Your total income is everything you receive (or are due to receive) from your business (less only VAT if your business is large enough so that you charge VAT).
You pay income tax on your profit, which is your total income less business expenses. For a business that is run from your own home, it can be difficult to work out what is a business expense and what is actually your own domestic expenses. Rather than try and work out what is and what is not a business expense yourself, if you are a Childminder you should use the NCMA guide. Some of the items in the guide are obvious 'direct' expenses, such as the cost of paint and play materials for your mindees. But some are general allowances, particularly the 10% of total income which is supposed to cover wear and tear and replacement of items in the home used for childminding (KatyMac mentions the 10%, but not what it is for - this is important because it means you can't include as a business expense specific items you replace, like new kitchen lino because the kids have trashed it).
So if your total income is £10,000 and your expenses are £4,500 your profit will be £5,500.
The next step is to add up all your income (part time or temporary jobs, interest on savings etc.) This will give you your total taxable income, and now this is where the personal allowance comes in. If your taxable income is less than the personal allowance you pay no tax. In my example, £5,500 is less than the £6,035 personal allowance so when you do your tax return in September 2009 there will be nothing to pay.