Childminder & Carer - Tax Return

[Hartley]

Hi everyone - I'm sure I can't be the only person who is a Childminder and is in receipt of Carer's Allowance. My question is, for benefit related things I can disregard 2/3rds of my income - but for the purposes of tax, I can't do this - I have to declare my gross income. I spoke to the NCMA about this who advised I can disregard 2/3rds of my income for tax, but the taxman says I can't - does anyone know from personal experience who is right - or does anyone know from an accounting point of view what I should do?

Thanks,

Hartley

[sarah707]

For the tax man...

Work out your total income... take off your expenses (including 10% wear and tear and other percentages, food etc) and then give the tax office your final figure.

This might be up to 2/3 of your income but it might be less. It totally depends on your income and it must be accurate.

THEN you must put the amount you have received from carers allowance in the box on your tax return that asks for figures from taxable benefits!!

So your total taxable income is your final childminding figure PLUS your carers allowance figure plus any bank interest you might have earned etc...

If you have to pay tax it will be at 20% of the total of any income over £6035. This will include carers...

So... your childminding income after expenses is £3,000... your carers allowance is £2400*... your bank interest is £40... your taxable income is £5440... no tax to pay

OR... your childminding income after expenses is £5200... your carers allowance is £2400*... your bank interest is £40... your taxable income is £7640... tax to pay 20% of money over £6035 = £321

Ok so far??

For the carers allowance...

Give them you total figure (before expenses). You should have the simple childminders form that does not ask for expenses. If you have a longer form with tables of expenses to fill in, ring them and get the childminder one!

They will automatically disregard 2/3 of it.

They will then decide whether you are eligible for carers allowance next year.

IF the 1/3 of your total income goes over the amount it says in your letter you are allowed to earn every year then they will reduce or stop your carers allowance.

You are not supposed to be a high income earner and get carers allowance ... they figure if you are earning a lot of money then you don't need it!! That is why it is a taxable benefit.

* Sorry I can't remember the actual figure but it's around that isn't it??

I really hope this makes sense :D

[Minstrel]

Sarah I have to ask.................



Where do you keep it all????? :panic: :panic:

[sarah707]

Sarah I have to ask.................



Where do you keep it all????? :panic: :panic:

I just hope I've got the numbers right :panic:

Numbers are not my strong point :laughing:

[ORKSIE]

Sarah I have to ask.................



Where do you keep it all????? :panic: :panic:

I was thinking the same, dont ever leave:thumbsup: