Tax Return - Childminders

[mycarscallednev]

Hi - I've looked through old threads - but need something up to date now. I was wondering when we claim for things like 'household' ie loo rolls, tissues, cleaning liquids and wipes do we claim the whole cost or a percentage. Also is it the whole cost for toys and paper or a percentage - its driving me mad trying to work this out!

HMRC guidance here.

You can deduct 10% of your total CM income for household wear and tear/ general cleaning items. You can also deduct for cleaning stuff separately if you want to.

Anything you have specific receipts for - like toys and paper - should be deducted separately.

The 10% allowance is just for wear and tear of your furniture and soft furnishings it does NOT cover general cleaning items, toilet rolls or tissues so you can claim a proportion of these separately.

thanks everyone - humour me, as I'm giving up the will now - how much % wise do I claim for general items?

Also the £10 per day for non receipt items - is this per child?

Umm - what £10 per day? You can deduct 10% of your income for wear and tear, and you don't need receipts for items of under £10, but there isn't a general £10 per day allowance.

The easiest way is to start with the figure for your total income for the period. Then work out

1. the percentage of heat/light and council tax/water rates you're allowed (depends on how many hours per week you work what percentage you can deduct).
2. 10% of your income - this is what can be deducted for wear and tear
3. An amount for food and drink for each child for each day it's with you
4. Other allowable costs: toys, outings, books, safety equipment, stationary, travel fares, the NCMA subscription, public liability insurance premiums and the actual cost of a telephone used for childminding purposes
5. A cost for your car if you use one

Add up 1, 2, 3, 4 and 5 and subtract them from your total income figure. That's your profit that you declare.

An accountant may be better placed to advise you on this but if you have a large number of children I would suggest a totally different account for your business, if not too difficult a totally separate purse too (I know many c/ms who do this and I am one)and my accountant is very happy with it

Whatever you buy for the business you can then claim without having to calculate %....not sure how people calculate what % of toilet rolls gets used by the kids?

There's no guidance on the HMRC website (that I could find) about claiming a percentage for general items.

thanks everyone - humour me, as I'm giving up the will now - how much % wise do I claim for general items?

Nobody can tell you that, you have to work out and justify a percentage for yourself. Some childminders will buy toilet roll separately for minded children, so it could be 100% for some things.

Also the £10 per day for non receipt items - is this per child?

You are misunderstanding this. Any item of expenditure that is less than £10 does not require a receipt (this is a unique concession for childminders).

So if you have 5 children and you have a trip to a park and buy them all an ice cream for £1.50 each you don't need a receipt. But if you buy them all lunch and it costs £25 you need a receipt.

Of course if you don't have a receipt (e.g. something bought at a car boot sale) that doesn't mean you can't claim the expense, but it does mean that you need to be able to justify why you don't have a receipt and to provide some other evidence of the expenditure.

I let my accountant get her head around this. Well worth spending her fee.

OK, thanks for all of this - I work 45hrs a week so should be able to claim max allowed for full time - I have receipts - and started out in the year being really organised and keeping each months in a folder - and then it all went horribly wrong and the rest are all stuffed in an envelope!

I'm told we can claim for annual membership too - so are putting Nat. Trust etc in - although as this is a rolling Direct Debit may just have to show this via a bank statement if asked?

So the £10 thing - do you just show a total for the year, or do you have to itemise and justify each spend per day/week/month?

Oh to be more organised!

........... and can I ask, who on earth has seporate loo roll in the bathroom for for minded children - what do you do buy cheap and nasty for the minded children and Andrex for the family..........Oh no children, not that one - you have the one-ply we have the quilted, or maybe the other way around so that you can claim more money back!

All HMRC want is the total income, amount of deductions and final profit. You really don't need an accountant, it's a very simple sum and the tax return form is very quick to fill in! I spend about 30 minutes per year doing my tax return.

Thanks - going to phone a friend who has been doing hers for years - and doing a tax return followed by supper and a glass or two of something chilled will be far more fun than sitting here stressing over the bloody thing!

.... right off to get those loo rolls.............

I work 45hrs a week so should be able to claim max allowed for full time

If you are talking about the fixed percentages for "Household Expenses" you can claim if you work at least 40 hours a week, these are 33% for Heating and Lighting, and 10% for Water Rates, Council Tax and Rent. You cannot claim any other expenses (like loo roll - which I agreee is not a great example) using these percentages, you have to be able to justify any percentage you claim yourself.

I'm told we can claim for annual membership too - so are putting Nat. Trust etc in

You can only claim 100% of National Trust membership if you only use it when childminding. And in theory you should declare this to the National Trust because they cannot claim back tax through Gift Aid if the subscription is a business expense.

So the £10 thing - do you just show a total for the year, or do you have to itemise and justify each spend per day/week/month?

You have to itemise each spend.

Oh Mr Fish - are you a tax inspector?

Thank you for your help - and it has helped a huge ammount - bet you can do your tax return with your eyes shut!

Oh the joy of the tax teturn, I'm so looking forward to it - maybe I should become an MP - they claim for everything, balls it up, but get let off. Shame I haven't time really!

I list all my income and expenses (including a proportion of loo roll ) on an excel spreadsheet and just take the totals off there for my tax return.

Mr Anchovy...I am going to humour you if you keep the will to live you could organize a really useful workshop for c/ms to know how to ccounts and a tax return!!!

I am intrigued by one thing...why are childminders given this special concession about receipt for under £10? don't tell me it was negotiated ages ago by our association? I have never understood their paperwork!!!
My accountants want receipts even for a £1 where I don't get a receipt I have a separate invoice book to itemise anything i paid for...I don't find this a problem but as said my business is never mixed up with my own personal money

My children have 'sof't loo roll and also their own loo hence easy to know what they use in that department!!

Mr Anchovy...I am going to humour you if you keep the will to live you could organize a really useful workshop for c/ms to know how to ccounts and a tax return!!!

I could, but you can't reach many people with a workshop, and it takes travelling time/cost to attend. Instead I am working on something delivered over the internet. There may even be a paper version.

I am intrigued by one thing...why are childminders given this special concession about receipt for under £10? don't tell me it was negotiated ages ago by our association?

Perhaps surprisingly, yes it was!

My accountants want receipts even for a £1

Are they the same accountants you had for your pre-school where the concession wouldn't have applied?

where I don't get a receipt I have a separate invoice book to itemise anything i paid for

Many people use a sheet of paper for each month with just a line for every item, you can then staple the receipts to the paper - I'm going to have a template up on my web site soon.

I used to do my own tax return, but with a CM business, and a freelance business (different industry) and a new business being set up.. I let my accountant deal with the tax. Have more than enough to have to think about and run.

...have more than enough to have to think about and run.

I think thats actually true for all childminders, particularly those just starting out. The problem is that most childminders (particularly those just starting out) don't think they can afford an accountant. I'm working on this.

Mr Anchovy Some good news there as I know many c.ms would like some sound advice on the basics. Many do not understand what they can 'claim' as a home run business
I understand about the problems with travelling etc but if we could get some c/ms out for Ofsted there may be interest in a session with you? not difficult to advertise and you would recoup your costs?

Surprise surprise our association negotiated something about 35 years ago and it still stands? Time to move on ( a bit like our registration fee...move on please!!)

No but I prefer to account for every expense no matter how little....does not take any time really

I use an invoice book and put every expense in there especiall those I get no receipt for...

May sound strange but I actually like doing my accounts every week and keep it all updated in my ledger then on to the spreadsheet which makes it easy for the annual tax return the accountant submits to IR !!!