Childminder finances

[OneWithTheForce]

I am registering and trying to plan ahead. Wrt finances, will I need to have a separate bank account for childminding income and expenses? Will it need to be a business account? How do you manage expenses like diesel for you car if some of that diesel will be used for personal use and some for childminding? Or small purchases like toilet rolls or milk? How does everyone else do it?

You don't need a separate account if you're a self employed sole trader. You might like to have one though, to keep the finances completely separate. Put your mileage down for the diesel at the Hmrc rate per hour. This also takes into account wear and tear on your vehicle. Toilet rolls - if you use 50% for minding them put that down as an expense. Adjust for other household stuff - cleaning materials, printer paper, etc.

Whatever you do - detailed records are your friend. About 1/3 of your income will go in expenses, depending on how often you go out, whether you provide food and nappies etc.

Many banks have rules that it's a breach in conditions to use a personal a/c for any business expenses. So check with your bank. But will be easier to track things if separate.

Sorry no other advice as in a different industry. Good luck

I have 4 separate accounts, all personal banking with Halifax but 3 are used for childminding:
1 for parents to pay me & I have a debit card for this account and use it for any larger payments (resources, insurance, fees etc)
2 savings accounts. First is for deposits field for duration of a child's contract and the second I transfer a % of my earnings each month to cover tax & NI

Sounds a lot but works for me. For household items I keep all my big shopping receipts and highlight any cleaning products, toilet/kitchen rolls etc and put through my expenses at 50%.

A word of advice after I spent year worrying I was under-claiming: if you're in a high fee area your expenses are likely to be nearer 25%

Thanks everyone.

thisgirl your system makes a lot of sense. I run several accounts for my own personal finances as it is so I am used to working that way.

girlelephant thanks, I am with Santander so will check out whether I am allowed to run my business money through my personal account.

I'm a sole trader working from home (not a CM) - I claim a set amount per week for use of home as office (accountant advises on what is reasonable), 45p per mile for mileage for meetings etc and a percentage of any resources I use e.g. when I bought a new laptop I think I claimed 80% of it for work as that's mainly what I use it for, but not exclusively.

You do not need to have a separate bank account to have payments made to you as a childminder so whatever bank/building society account you have at the moment, then as long as you give parents paying in details, they can pay straight into your bank account.

What you need to do is register with Her Majestys tax office that you are self employed.

Then you will need to fill in an annual tax return detailing what your income and outgoings are. This is nothing to do with what bank/building society you use.

I've used the Pacey method to record everything you earn and pay out and they have a lot of information on their website if you're not sure.