Does this count as self employed/working 16+ hours per week to qualify for the 30 hours childcare?

[dubbyoo]

Hoping some financially/tax savvy mumsnet terms can advise.

I've recently given up my part time job with a plan to "portfolio work" for a couple of years. AKA study part time, volunteer one day a week, sell all our junk on eBay, look after a flat that we rent out, do some freelance work, sell some home made crafts, manage the renovations on our house and do lots of diy and mum a lot with our 2 and 5yrd olds.

I'm looking at how this effects eligibility for the free childcare hours for my soon to be 3 year old and I'm gutted to find out that I'm no longer eligible as I'm not "employed" for the 16 hours minimum. My earnings from the various sources may well take me into the "earned the equivalent of 16 hrs a week on minimum wage", but only just. It's going to be a very frugal couple of years while retraining and doing some renovations and trialing whether I can make small amounts of money from art/craft things. Qualifying for the 30 hours free childcare is pivotal to the plan working!

So.. my question really is what counts as income to make me honestly eligible for joining the "tax free" childcare scheme and 30 hours funded nursery?

The government do give you a one year grace period when you register as self employed, so I'm hoping to do that for the time being.

As a self employed person, does rent from the buy to let count as part of my income for the 16 hours? I already do an end of year tax return for this but I'm guessing once I'm self employed, this will be a bit more complicated.

Background: partner's income (

Tax & benefits. The govt would prefer everyone to be employed paying taxes via PAYE rather than claiming expenses to reduce tax liability. They also don’t want people claiming childcare/working people’s benefits when they are claiming to be self employed but in actual fact just pursuing a hobby & not actually making any profit.

The only thing they did do recently to make small self employed earners lives a bit easier was the introduction of the £1,000 Trading Allowance.

Because hobby businesses don’t pay anything in to the pot. It’s al take take take. Volunteering and studying is a lifestyle choice and not one the taxpayer is happy to fund.

As a childminder, I take a loss on the fubded spaces. I work long hours. Why should I (or nurseries) be subsidising your pottering about doing not a lot lifestyle?

Letting of a rental property doesn't count as self-employment for tax purposes unless it's a furnished holiday let. I believe the same definition is used for tax credits and so the income from this wouldn't be taken into account for NWM purposes.

Selling your own possessions probably wouldn't count either if they particularly looked into it; buying to resell would.

I am freelance and I work an average of 20 hours a week. The forms I filled in applying for tax credits required a list of my business income sources, including evidence such as advertising, client lists, invoices, my accounts, quotes, what and how I charge for the services my business offers. It was a full day's job compiling all of these.

I sell spare stuff on eBay to bring more money in but that is not a business, it's just me getting some money in for bits I'm no longer using. There's no way I consider that to count towards my working hours.

If you do list that as a source of income (the forms ask for details of your income) you had better be declaring it on your tax return.

Remember that fiddling numbers for benefits claims is very severely dealt with and if it came to light you would have to pay back what you hadn't been properly eligible for.

The figures I give to HMRC for income are exactly the same, to the exact pound, as on my tax return. I'd expect anything other than that to be investigated, and rightly so.

As georgie says the government only allocate £5.80ish per hour to providers. My CM just asked for more which I paid as I didn’t want to lose her.

Most places it’s nowhere near £5.80!

Why don’t you just use the 15 hours & pay a bit extra? If you can afford to renovate & study without needing to work then you should contribute to childcare costs.

Wowsers I presumed that £5.80 was standard GeorgieTheGorgeousGoat, we are in London.

Once you've registered self employed you need to meet the income requirements of £125 (?) a week and 16 hours to qualify. You get a years grace period.

£4.30 here in Berkshire. I’ve heard as little as £3.80.

selling your own stuff on ebay is just something you could do its a bit of a red herring - you can't really claim it as a job as such so deprioritise it in the scheme of things

Selling craft stuff can easily add up to 16hrs a week if you can focus time blocks - set up etsy or folksy, do one or two shows a month, use the show time to make if you can so you are getting double out of the time and it attracts people to your stand, have a website, sell on ebay although that is less successful than specific sites. Have some consignment shops as well. You could use others to make for you and sell on - to your designs for example. This would increase your earnings per hr as its the making time that isn't that productive. (pay a piece rate to contractors) Charge fairly for your work and target a higher paying market segment - look at how you market - and you could realise a better yield for your work.

Selling stuff you already own is subject to capital gains tax not income tax, on the gain (ie price sold less price originally paid plus indexation allowance). I expect the stuff you’re selling will go for less that you paid for it, so it’s not taxable and never income tax anyway, declaring it as taxable to benefit from free childcare would be fraudulent.

As another pp said, property rental while taxable does not count as self employment income.

Presumably the 1 year grace period mentioned has some level of proof required, otherwise everybody would be doing a bit of crafting to get 30 hours free childcare, particularly as the 30 hours is only claimed for between 1-1.5 years per child!!

When I was freelancing, I had to specify what I was doing and projected earnings over 3m to qualify for the free hours.

It does read a lot like you're trying to fiddle your income to get free hours that you're not entitled to.

You're choosing not to work, so surely you can look after your child at home?

I don't see why my post was harsh. You do not have a business you have various hobbies. If you are studying there are various grants available to parents and of course maintenance loans if your doing a degree as well as grants for child care. If I were you I would drop the volunteering and get a small job in the same field and study, ebay and decorate, craft etc in the evenings and weekends or when my child is in pre school for 15 hrs. It won't be long till he's in school and you will have loads of time to persue your hobbies.

@ClashCityRocker @INeedNewShoes thank you! This is the kind of information I was asking for. I absolutely do not wish to try and fiddle or do anything fraudulent which is why I asked the question.

So rental income is a no go being classed as self employed income. This makes me more inclined to pay a handy person to fix things or a painter to redecorate rather than doing it myself. @BritInUS1 I guess you must have very little maintenance or constant tenants/use an agency if you can run several properties for less than 50 hours work a year. Good for you!

@RB68 Thank you, this is good advice. If I can make the craft stuff pay a bigger income stream then I could legitimately claim the benefits when combined with occasional freelance work to clock up an extra 20 hours or so a month.

I think I need to fully research how being self employed works for tax purposes. What I need to be able to document etc and use the one year grace period to try and make sure my earnings rise above what minimum wage would be

If you haven’t registered as self employed yet, hold off if you can till April. Then you will have a full tax year where you can claim the 30 free hours with no pressure to earn a certain amount. It will also give you time ahead of the 19/20 tax year to either build up your self employed income, take up employed work or just take the hit on paying for childcare for the last term before school.

Sorry meant ahead of the 20/21 tax year. And you can also claim the tax free childcare support in your first year as well as the 30 free hours

@Orangeteddy thank you. That is a very useful and sensible suggestion

Following with interest. I am about to start my own cleaning business, I did not realise that I could get 30 hours free. Do you know if there is an upper limit for the other parent? And what happens if their income isn't fixed (ie commission based?)

@thenewaveragebear1983 The upper limit for the other parent is £100k

Thanks berry, I'm assuming that's pre-tax? What if the other parent exceeds that upper limit? Are we liable to owe the entire years worth of additional 15 hours back (as with child benefit?) Its unlikely, but possible; if Dh had a very good year for example.

Why should our family be ineligible for the tax free childcare because of the way we split our working hours? A family with 2 parents each working 16 hours a week would qualify, but a family with one parent working and one parent studying/volunteering/earning but earning less than minimum wage self employed would not qualify?

Because it’s designed to provide economic support to people who are making and economic (and tax) contribution. It’s not saying people who don’t meet the criteria are bad - it’s simply a scheme designed to offset the costs of that contribution.

Be honest with yourself. This isn’t about ‘how you split your working hours’. This is about you wanting to do something else in the working hours for which this scheme was designed, but still get the benefits of working the hours.

Incidentally, rental income does count as income for Dh, he has to declare it and it would be taken into account as part of his income for this £100k limit, so surely it would count as income for the OP too? Although as it's an existing business, not a new start up, she would need to earn at least £120 per month?

Are you actually kidding? You are looking at ways of fudging the system so you can run a "craft business" and be a "stay at home mum" whilst you study very part time and claim 30h a week childcare so you can basically sit on your bum with your kid at nursery. Why don't you get an actual job whilst you study? Or pay for your own childcare? Why should I have to pay for the "free childcare" so you can "Mum a lot" and "do lots of DIY"?!?!?

What a pisstake....