Money stuff

Tax deductions

Childminders are self employed and responsible for their own tax and national insurance. You are legally obliged to contact the tax office within 3 months of starting to work as a childminder – you can do this by ringing 08459 154515 or using the CWF1 application form available from post offices. You can also register online here. You will then receive a self employment tax return the following April.

Useful tax links

Pauline at the childminding forum suggests you use the link at hmrc here for working out the percentages.

To contact the self employment tax help lines, look here for more information. .

Remember!

·         The tax year runs from the previous April to the current April, so you cannot give any figures that relate to income/expenditure outside of these dates;

·         If you make a loss in your first year, do not panic – lots of childminders do, because of buying toys, resources and other start up costs. Your tax return must show your income from any start up or other grants as well as childminding income;

·         You must keep your business records separate from household – some childminders choose to use a separate bank account but this is a matter of choice;

·         You will need 3 main figures for your tax return – income (from childminding, any other jobs, taxable benefits, houses you might rent out, bank investments etc)... minus expenses (as below)... equals total taxable figure. As of the 2008/2009 tax year, the allowable income before paying tax at 20% is £6035.00;

·         You do not need to keep receipts for under £10;

·         You must keep your records for 5 years after the tax year;

·         You must keep food receipts for 3 months, to comply with food hygiene regulations (this is not an Ofsted or tax office requirement);

·         Your books are not of interest to Ofsted;

·         Don't put through large amounts you cannot justify;

·         Don't put through things that you don't have proof of purchase for;

·         If you put through a total of £12000 with £7000 loss to expenses one year, DO NOT put £10000 with £8000 loss the next unless you have a very good reason ... it looks wrong and will shout fraud.