Just registered as a Childminder, any advice??

[chickenmama]

Hi, I've recently registered as a Childminder but haven't started looking after any children yet. I'm currently a full time mum with one dd and receiving benefits (IS, HB etc).

I've seen on here that what u get as profit from childminding isn't as much as u actually earn because of expenses... but I'm not sure what these would be. I'd be grateful for any tips, and whether you think I would be better off than I am at the moment.

I don't want to start if it won't make much difference financially. I have been approached about minding 2 children for 23 hrs a week (about £140).

Also, when working out possible income, how much, if any, would I have to deduct for tax and National Insurance?

Thanks!!

Best way CHicken, is to ask as you go along.

Come in the staf Room and we will answer any questions you like

And it will make a difference to you as from what I can gather from others on benefits you will still be able to claim some HB, and you can ofset 10% of your utilities as expenses, and lots of other things like that.

From experience, I've found that the allowable expenses (10% off total earnings for wear and tear, proportion of energy bills, food, toys, equipment, outings, etc) -come to about a third of your total earnings. You might find that the housing office or other agencies allow for more - don't take this as gospel but I've heard that they allow two thirds as expenses, though this was in the past.

I think I'm getting confused already but I do know (spoke to the Job Centre a while ago) that two thirds of your earnings are disregarded, so only one third is taken into account when working out benefits...

What do u mean by 'ofset 10% of your utilities as expenses'? Does this still apply to my situation?

Sorry, I meant for working out tax you can estimate general wear and tear to be 10% of earnings before you even look at other expenses such as heating etc.

The reason I was telling you that childminding expenses in total normally work out at about a third of the income (unless you're working v. v. hard and earning a lot!) is so you can get an idea of whether it will be worth it for you, which may be the case if the benefits people accept two thirds as expenses.

One advantage of becoming a childminder may be that you can do courses and improve your prospects in the longer term.

Ok, let me see if I'm getting this right... should I basically forget a third of what I could earn as this will be going towards increased utility bills, food, toys, outings etc? ie when working out how much better off I might be, take off a third of the earnings to begin with and just look at the remaining money as 'my' money??

I think one of my biggest worries is keeping the children occupied, I don't have much here for older kids to play with and entry to places can get expensive.

Thanks for all the help so far!

It can be more than a third tho' or less - it depends upon how much you spend

You can also take off:
10% of total income as wear & tear
33% Of Gas/elec
10% of water rates
10% of council Tax
money towards toys/books/craft etc
Money towards cleaning materials/ toileties
money towards transport (eg petrol at 40p a mile)
Money towards food for your mindees

You will pay NI at about £2 a week plus 8% of your total profit (which is done on your self assessment form)

I'd advise registering to do your SA on-line & also you must register with HMRC within 3 months of starting

Thanks for the info Katy, I wouldnt have known how to find any of that

One question, how exactly do the figures work? Are they amounts I don't get taxed on, or money I can claim back from somewhere, or something else?!?!

Forgive me for sounding a tad thick, I'm very new to all this

OK Most of this is in your NCMA handbook but-

self employed people (eg childminders) have an obligation to pay tax & NI
This is normally calculated throught the "Self Assessment form" often on-line

You earn say £7000 (called turnover), but you spent £3,500 of that in order to earn it (called expenses), so your net profit is £3500 which is below the tax threashold

But if your turnover was 10,000 & your expenses £4000 then you net profit would be £6000 which would incur a tax (& NI)liablity

Yes .... but that doesn't take into account the reduction in your benefits does it? Oh dear, it's a bit too hard for me to work out - perhaps someone else can help!

One thing worth thinking about is that it will probably be important to you to have a steady income so when doing your contracts perhaps discuss with the parents how to 'even' things out throughout the year to take account of holidays (yours and theirs) and days off or sickness. For example 48 weeks full fee plus 4 weeks half fee, added together and divided by 365 to get daily rate. You would also have to take into account expected changes such as starting playgroup, school - and what would happen if they wanted to change things, like drop a day, or if they left (so they'd effectively got a discount for holidays not taken).
What ages are the children you might be minding?

ah I havent yet got my NCMA handbook, hopefully things might become clearer when I do! The turnover vs expenses info certainly helps

I know what u mean about complicated ATG, think I'm due another trip to the Job Centre!! The kids I've been asked about are 4 yr old twins starting school in September. I think mum said she only needed child care until July so I might use this as a bit of a trial run and see how things go!

glistens, i wouldn't recommend that way of being paid, I tried it a few times, found that parents really took advantage.

If the dropped off late would pick up late, and I mean LATE, saying well we pay you a set amount, next week I dont need you as much, so it dost matter. IT DID, I have a life as well.

A hourly rate for set times can be a lot better, everybody knows where thay stand, and as long as you have a contract that says, exact hours and that exact hours have to be paid for, unless previously agreed with the CM, it does even out really.

Soshe - I get paid like that all the time

Any extra is added on to the next bill

Any time not minded is lost

It can work very well

Maybe it was just my parents I had, it wasn't that I couldnt charge them extra it was the fact that they felt that as they paid me they same each month they could turn up at any time, when I billed them extra, they always always complained about it and argued.

Well I currently have 17 parents on the system - they only pay for the hours they are signed up for eg 9-3 on Monday & Tuesday day just paid for monthly

I only have 6 now, 3 full time, 3 before and after school.

I charge them monthly in advance 7.30-4.30 with 4 weeks a year holiday for them at retainer, two weeks at Christmas and Bank Holidays at reatiner for my hoilday and two weeks unpaid holiday for me.

Have found this is the best way to do it for me.

Oh 4 year old twins sound lovely - what a nice way to start childminding! Don't buy too much in beforehand as you won't know what they'll like doing - some do craft things non-stop - others won't touch it. Some play doh is normally a fail-safe to start with - buy only one colour to save on arguments and so they can't turn it all brown - or if I get 2 colours I get ones that turn a nice colour if mixed. Sticking bits of magazines onto old card using flour and water glue is very cheap.

Chicken, do you have and Area Support Co-ordinator that will give you support during your first 18 months, she will be able to answer alot of your questions. Or a Business Support Officer (usually contactable through your Childrens Information Service).

Or a Network Mentor? Usually done through the NCMA.

chickenmama you mentioned being worried about keeping the kids entertained, this is worrying me ive just started and have 3 kids and im bored never mind them!!i think ive made a wrong choice
sorry for hijacking your thread

Thanks guys, you've all been very helpful! I feel much more confident about getting this all set up.

Allthatglisters - fab activity ideas, thanks!

ihateironing - sorry to hear you're bored! have u tried toddler groups? I've been looking locally and there's pretty much one every day so will probably make use of those... and soft play centres and parks too!

Hi there,
i was wondering if someone could help me?
I'm just setting up as a childminder and am going to be on working tax credit. I understand they only take into consideration a third of my earnings for tax purposes but does this mean i don't have to worry about keeping receipts and discounting things like %'s from my utility bills etc because they are basically doing it for me? It's all getting a little confusing, just need somebody to point me in the right direction!!!

Thanks

Deller - I don't know the answer, but you may be better off starting a new thread. Im sure there will be someone more knowledgeable than me

Ok, Thank you