Is £500 a month a reasonable earning goal?

[peckarollover]

£500 a month would make a huge difference to our family (it will cover paying off my huge debt and let DH's good salary deal with bills and life). Is this achievable? Roughly how many hours/children does this equate to? Our going rate round here is about 3.50 an hour

well, if one child = £3.50 an hour
with a 35 hour week (£3.50 * 35) = £122.50
a four week month = £122.50 * 4 = £490 a month.

So one child, full-time should give you the extra money.

If you want to be paid monthly then you'd do the £122.50 x 52 wks / 12 = £530.83. Just depends how you do it.

Go for it!

maybe aim for one full time and one before and after school?

I really have no idea how the tax works. Just to be very rough and inaccurate how much would come out of each 3.50 towards tax and national insurance? say 50p of each 3.50? or more...less? ohhhhh i dont know!!

With deductions you can claim you should not have to pay any/much tax at all.

I would pay the NI contributions at the lower threashold, it covers you for sickness and maternity benefit.

I had a turn over of £10K in the first year and made a loss of £800
Y2 Turover about £20K estimated profit.....£5000

Lots of luck

Most minders pay very little tax as we are seen as notorious low earners. However, if you work to full capacity, it doesn't take a brain surgeon (or accountant or, worse still, someone from the tax office) to work out that it can actually be fairly lucrative. Most minders I know pay less than £500/year in tax. Very few minders claim to earn more than £15,000, so enabling them to do a reasonably simple tax return (though am never sure they are all being honest!!!)

Expenses can be quite high - I do a school run every morning and afternoon, have to drive to some of our activities and do an occasional nursery run, and my petrol expenses can amount to £100s each month. It's important to keep a tally of all minding expenses - even birthday presents for the children, drinks (including yours) at any groups you attend, as well as the obvious - food/drink you supply, equipment, insurance ...

Katymac - how could you make such a horrendous loss?? I am gobsmacked!

If there is so little money to be made, why do so many people do it I don't understand. All the childminders I know seem to do rather well out of it.

Sometimes it's just the way that things work out. I teach music from home and the first year (last year) paid a staggering $70 (about 20 quid) in tax. Yet we really felt the extra money. A lot of things I would have to pay anyway such as a percentage of rates, electric, mortgage interest, some car travel was paid out of turnover, and tax was only paid on the profit. So while officially I made $10 a week (3 quid) it was like having a 25% discount on a proportion of all of our bills.

This year my tax bill will be much higher, but my expenses are still around half of what I earn.

ThePrisoner (or may I call you No6)
I bought some wacking great equipment (wendy house/climbing frame)& lots of wooden toys, I live in the middle of nowhere (so have to drive everywhere), I decorated a conservatory (first yr and second cons in the second year) including furniture.......

......and I used to work for the IR (which helps when reading tax info)

With regard to being seen as a low-earning profession - many minders do the job to enable them to earn money whilst looking after their own children at the same time, which would restrict the number of minded children they could have (and hence less money).

Many minders are unable to fill their places for a variety of reasons, so may find themselves earning a paltry £3.00/hour for two days work, because that's all the work they can get. Some minders don't want to work to full capacity in the first place.

It is the nature of this job that you have no guarantee of income from one month to the next (as for all self-employed).

My own children are well past the age of needing a mummy around, so I can have the maximum number of paying children. I've been minding for years, and rarely have to wait for long to fill places. I'm very very lucky, but I work jolly hard to earn my money. There are few who work to full capacity, perhaps by choice, and they are the "low earners".

I would recommend any new childminders not to go mad buying equipment and toys to suit all ages until you know what ages your first mindees might be. My first minded child was a small baby, and I didn't need a high chair, toddler car seat etc. for some time.

That's right, ThePrisoner, I was buying equipment from my DD for the business in the first year

Also I have income from another job so was quite happy to make a "loss"

It's a good idea to keep a running total of expences/income (including the hidden expenses like Council Tac, Water Rates, TV license, Sky Subs,HH Ins, 40p per mile, season tickets to local attractions, food, toiletries, cleaning supplies, craft supplies, proffessional subs, magazine subs, stationary. broadband,phone, mobile phone, electricity, I pay a gardener, wouldlike to have a cleaner, fish food, Guinea Pig food, Chicken food (but not cat food as we already had the cat - but I do claim his injections & vet bills), computer purchase & printer inks.....I may think of more later)

KatyMac, I'm fairly new and have been keeping all sorts of receipts etc but haven't yet needed to do a tax return. I have a cat - can I really claim for injections etc and vets bills? I must admit having my cat has helped as all 3 mindees so far love cats and want to cuddle him loads

One thing I must start doing is writing down mileage (keep forgetting!)

Are you also really allowed to claim the Sky subs, broadband etc? Is it a certain %? As for phone, presume you have to keep tabs on calls and just claim for childminding calls? My mobile is pay as you go so I don't get a bill which is hard. I've already had to send quite a few texts to one person.

Any help would be great!

OFSTED need all pets that can be innoculated - to be innoculated so therefore yes (esp if you didn't before & we now have both cat flu & leukemia (sp))

For the others CT, WR & Elec are set by IR & NCMA

50% for phone/mobile/tv/sky on advise of my Tax Inspector (Small Business Advisor)

50% Toiletries (loo roll soap etc) & 50% cleaning (bleach/cif/washing up liquid/washing powder etc) + milton/wipes/suncream at 100%

hth - any more q's just ask

Sorry - I pay a package to BT so all phone and broadband included(just 50%) remember ofsted require you to have access to a phone

Thanks Katymac, that's GREAT!! I didn't realise I could claim that lot and was worried I wouldn't be making much money so that helps!

About to buy a people carrier as I've got too many kids to fit in my car during the hols and school runs. Don't suppose I can claim for that?? only joking!

Did you have to pay for that advice from tax inspector?

No - she volunteered to come to the house - phone your local Small Business team at the IR

why can't you claim for the mpv? Or at least half?

I'll speak them then - thanks so much for that! As for the people carrier, I'll ask them as I'm only getting it for childminding. It's just that I thought you couldn't do huge things like that?? (can't remember who told me so will ignore that and ask anyway!)

I found that the 40p a mile worked out better over 5 yrs, then the depreciation plus expenses for that time

I ran the 2 senarios and put in estimated mileage/serviceing etc and for me the 40p a mile was better long term. If you are going to do it the other way - you need to think about an accountant.

You can't claim your chiropractor's bills on your expenses (despite the fact that my chiropractor has said that my problems directly relate to continually lifting/carrying children) - apparently, it is a "self-induced injury"!!!!!

Putting the mileage allowance on expenses is usually a much better deal than doing the cost of the vehicle/servicing/repairs for most minders (even for me, and I've got a dirty great minibus!!)

The amount of money that you spend on your job really can mount up - and don't forget that 10% of your earnings should get put down as general "wear and tear" as well.

We also had some major work done on our garden, which was for our own family's benefit, but I had to be aware of safety issues for my work (no poisonous/thorny shrubs and plants!) and also included a larger patio area than we needed to use for sit'n'ride toys, and a purpose-built area to house the climbing frame/swings etc., so I put down a sizeable chunk on my expenses that year.