Another food expense query

[mum24]

I was talking with a cm friend today, and she says she charges a fee to parents for lunch and evening meal on top of their childcare costs. But she then takes the cost of this off her gross earnings at the end of the year, so its not included,
Is it ok to do this?
What do other people do tax wise with their food bills?

[cathtee]

If your friend charges the parents for the meals, then I don't think she can deduct it off her earnings as an expense as it is an income, Mr Anchovy if he sees this
will put you right, I don't charge for meals so I write off the food I buy as an expense.

[Kiddleywinks]

No, it's not alright!
All monies received should be shown as income, so if she is charging for meals as an extra, she should be declaring that income.

Mind, if anything, she's losing out as she's not getting the 10% wear and tear deduction on it if it's not showing up as income.

[blue bear]

Any income coming in has to be declared, she can't claim wear and tear for charges for meals and so would be better off with an inclusive fee. She can claim the cost of buying the food as expenses as long as she has put the income through her books.

[Kiddleywinks]

Any income coming in has to be declared, she can't claim wear and tear for charges for meals and so would be better off with an inclusive fee. She can claim the cost of buying the food as expenses as long as she has put the income through her books.

Ok, I'm confused now lol (doesn't take much, especially on a sunday)

I don't charge extra for meals, it's included in my fees. I do however deduct 10% off my total income for wear and tear, then deduct my expenses, including food costs.
Am I doing it wrong?

[rickysmiths]

If she is charging for her meals this must be included as income so for example:

£1000 fees for month
£ 100 meals for month

Total income for month £1100 for tax purposes as this is gross income she would then take 10% off this for Wear and Tear and then take off whatever her expenses for the month were thus giving the net figure from which Personal Tax allowance is taken leaving the figure on which she would pay tax.

All income is added together whatever it is for, fees, meal costs, sale of any toys and the 10% is taken off the total income.

I can/t see the reasoning as to why food should not be included in the figures.

I must say though that I have always included food in my fees because I don't want to increase my income and I don't want to get into the situation of what to do if a child is off sick and obviously doesn't physically eat meals but I have already done the shopping and prepared them. I can see disputes with parents and so I find it easier just to include it and put the food used down as an expense.

[christine e]

Ok, I'm confused now lol (doesn't take much, especially on a sunday)

I don't charge extra for meals, it's included in my fees. I do however deduct 10% off my total income for wear and tear, then deduct my expenses, including food costs.
Am I doing it wrong?

No you are not doing it wrong - you are doing it exactly as I do :thumbsup:

[Kiddleywinks]

Thanks Rickysmiths and Christine e, thought I was losing the plot for a moment then :laughing: (yes, I know you have to have it to lose it lol)

I've re read Blue Bears response and think I misread it initially :thumbsup:

[MrAnchovy]

Just to confirm, you should never take ANYTHING off your income. This works in your favour because you can take the 10% wear and tear off ALL your income from childminding, including food (which is fair enough because there is wear and tear on your cooker, fridge, maybe crockery and cutlery unless you use them exclusively for childminding in which case you can claim for the cost anyway etc.), extra charges for trips out (which is illogical but tax is not about logic, it is about rules and they work against you often enough so don't feel guilty when they work in your favour!) etc.

You can of course include the COST of food in your expenses, whether you charge specificially for it or not.

[mum24]

Thank you to everyone for the replies.
I found it difficult to understand her system, and just had a feeling that it couldn't be right. I didnt think she was actually doing anything wrong though, but I suppose I had better let her see the comments on here.
Thanks again, it's lovely to be on here and have people to go to for advice.:clapping: