can any childminders answer a couple of questions please? (thinking of going into it)

[purple8pig]

Im considering becoming a childminder, but im worried because its essentially starting up your own business. I have worked as a care assistant before but never had any dealings with anything financial.

We also have no savings so not sure if it would even be do-able (start up costs etc) but I just worry about the money side of it really (ive spoken to some cms who have used an accountant?)

Im also unsure of how you would declare income/earnings to revenue and customers if you don't even know how many/ when you will get children

Am I just too thick to do this?

It’s much simpler than I think you’re imagining.

You register with HMRC as self employed (sole trader) and then at the end of every tax year (April 5th but anytime before January 31st the following year is fine) you provide them with your total income, total expenses and the difference is your profit. You pay tax and NI on your profit. They calculate that for you and you have to pay it by 31st January.

Done.

Just remember through the year to keep a track of all your income and expenses. No need for an accountant.

so say I started as a cm in may, then I wouldn't nedd to tell HMRC anything until the following april? or would that need doing before January?

thankyou that is helpful

also the few cm I know have their house set up almost as a mini nursery, labelled boxes, huge playroom. my house is small but homely and keen and id rather provide a more homely atmosphere. is that ok or does it have to be more of a formal set up ?
(obviously would do messy play etc and have lots of toys, but more like id do with my own kids (just more of it)

Yes so say you reg in May 2019- your first tax year will be 2019-2020, due and payable by bo later than 31/1/21.

I have a small home and garden, no playroom. My children are all at school and so we’ve thinned out the toys. I’m graded outstanding by ofsted.

That's really helped thank you :) I'm definitely going to look into it more in depth. X

Great! Good luck 👍

Georgie is right: I’ve never understood why some childminders think they need an accountant (I know a couple of accountants who think the same too.)

I find a lot of childminders overestimate the start-up costs but underestimate the running costs. As a result, they tend to think they are earning considerably more than they think.

I don’t have a play room and don’t have labels on boxes either. I’ve had one reduction in toys over the last 12 months and could do with having another one tbh. We have far too much stuff and never get round to having it all out. I’ve a lovely wooden dolls house for example, it comes out each school holidays for about half an hour, then they bored with it so it goes away for another couple of months. Such a waste and it takes up so much room. The things that do get played with over and over are the kitchen and food, dolls and pushchairs, wooden bricks and phones (preferably old real phones that look like mobiles). Everything else is a bit of a one hit wonder in this house.
By the time we have been to our group in the morning, come home, had lunch and a nap/quiet time, it’s nearly time to go on the school run. On the rare occasion we don’t go to a group, we do painting/craft or an adult led activity (for example colour matching), play doh or sensory play, so the toys hardly get a look in.

I also don’t have an accountant, I use a pacey accounts book and it is so straightforward, list of outgoings per month (which are really similar month to month), a list of who has paid me what and there is space in the back of the book for the sum to do your profit. It’s really easy and I actually enjoy doing my accounts as a bit of a brain exercise each month. (Best advice, keep on top of your accounts or when you come to do them at the end of the year the job will seem impossible).

Thank you so much! I really love kids and I think I'm good with them especially little ones, I think it really could be the best career move for me as its the one thing (I think) I'm good at! X

The bookkeeping/accounts is fairly straightforward.

As mentioned by Maryann, the Pacey accounts book will get you going. from your second year you can switch to a cheaper, plain accounts book From a stationer or create your own in Word or Excel.

As Georgie says, you’ll pay tax in arrears, so it’s worth knowing how much of you income to set aside so you’re prepared for the bill. HMRC has an online tax calculator tool which you can use each month as a rough guide of what you need to put by.

It’s also a good idea to save something each month to spread the cost of annual fees: Ofsted, ICO, Insurance, etc. They all tend to come up around the anniversary of your registration date. And remember you may need a new home insurer: some won’t put childminders on domestic policies.

Be aware that it can take time to get off the ground and build up enough business to get any sort of income (and it’s unlikely to ever be a great income). You may well be below the tax/NI threshold for the first year or so. You still need to submit a self-assessment even if no tax is due. If below the NI threshold, you can choose to opt in or out of paying NI: a Small Earnings Exemption will save you paying NI, but you can choose to pay in order to build up qualifying years.

Research the demand in your area with a growing number of schools taking children earlier and earlier many nurseries are closing down and childminder numbers are declining.
As a Rule childminders work with children for between 8 to 11 hours a day and then do paperwork, setting up, preparation and training outside of these core hours so make sure you go int it knowing its very time consuming for low income (few start off making minimum wage until their own children are at least 8).
Its a great job where you can make a big difference.

How do you work out your expenses if you provide food? I think I would find if difficult to separate what I spend on food for the minded children from the food my own family eats, iyswim.