The thing I dont get about tax is...

[legtc01]

The fact that say I earnt 10k per year which I actually got into my hand from all parents throughout 1 year, I would have to spend almost half of it just so I didnt pay any tax, is that right? So how could I live off 5k per year to pay mybills etc because if you put everything through your books, petrol, food, tv licence etc, your not ever going to get that money back even though my bills would have gone up and I would have to use more petrol, so technically wouldnt I be loosing out??

Or have I just got the complete wrong end of the stick with this tax business?

Also I currently work part time and have probably almost earnt the threashold for tax, so if I started being Self employed beginning of November, then I once i start earning I would already be at a disadvantage because I would be slapped with a tax bill in April, does that mean Id be better off starting minding in new tax year??

Hope this makes some sense...HELP!! lol :-)

[FizzysFriends]

You don't pay tax on the first £6100 (give or take a hundred, too late at night to remember exactly), then you only pay 20% tax, this is from your profit though not what you take, remember you can put a lot against tax.

You will have only used 50% of your tax free amount at the moment as we are in month 6 of the tax year.

[tulip0803]

Childminding is a low paid profession for the amount that we do:( . But the benefits are that you are there for your own children, you work from home and you are your own boss:) .

Anything that you buy for or use for your business can go through your accounts. If you started in Nov you may have already earnt your tax free limit but you may still make a loss for childminding once you take into consideration equipment, fees, advertising etc. Like all businesses you cannot instantly start making money and quite often it is a loss for the first year if you start later in the year.

It can cost a bit to start-up minding and you are not guaranteed of filling spaces quickly. 2 days I only have 1 mindee for 6 hours @ £3 per hour so I am making a loss or just breaking even at the moment:( . But if I fill the other 2 spaces I will be in profit for those two days IYSWIM:rolleyes: I work part-time too until the credit crunch lifts a bit here. You don't go into childminding to make loads of money - unfortunately - you go into it because you wnat to make children's lives better (or is that just me?)

[tulip0803]

You will have only used 50% of your tax free amount at the moment as we are in month 6 of the tax year.

Fizz it depends on how much you earn - If you earn £6100 a month (I wish:rolleyes: ) you effectively use the tax free amount up in the first month although they will divide the payments equally over 12 months IYSWIM. If you earn £12,000 a year you will reach it in 6 months and if you earn £less than £12,000 it will take longer IYSWIM But the tax office always takes it in 12 equal payments if you are PAYE.

[cher25]

you go into it because you wnat to make children's lives better (or is that just me?)

It isn't just you. I love kids and it's all i've ever wanted to do. Bonus is working for myself and then when i have kids, being home for them. :thumbsup:

Op, have a look at this list of things you can offset against your tax bill. http://childmindinghelp.co.uk/forum/showthread.php?t=2734. Hope it helps.

[FizzysFriends]

Fizz it depends on how much you earn - If you earn £6100 a month (I wish:rolleyes: ) you effectively use the tax free amount up in the first month although they will divide the payments equally over 12 months IYSWIM. If you earn £12,000 a year you will reach it in 6 months and if you earn £less than £12,000 it will take longer IYSWIM But the tax office always takes it in 12 equal payments if you are PAYE.

They take it out over 12 months though so it can't physically be used up before then, just theoretically.

Although if shes staying at her other just its irrelavant and she will pay tax on all the profit as I have to do :( think they should let me have a tax free allowance per job :laughing:

[Chatterbox Childcare]

You say that you would spend half of it not to pay tax could be true but you need to take into account that you would be paying this anyway - i.e. water rates, council tax, electricity, gas, petrol (more if you are going out), food etc.. so your expenses would not actually be more than you normally pay.

If you earn £10,000 profit isn't it better to pay £2000 in tax and have the other £8000 yourself rather than earning nothing to pay nil tax?

You have only used up 7 months of your allowance so far if you plan to finish work in November and so have 5 months left to use.

I don't know anyway who makes a profit on paper in the first years as you have so many expenses to claim and if you start childminding in November your accounts will only be for 5 months so you will make a loss.

[youarewhatyoueat]

I agree with debbie, if you're earning enough to pay tax after taking off all the expences surely you are better off than not earning anything. It doesn't make sense spending money just so you don't pay tax, better to have money in the bank after paying tax.

[Mari]

Half of what you take could go in your books, I write EVERYTHING that I pay out in my diary and highlight what I spend on childminding. IE, petrol (school runs, playgroups, training) all costs such as playgroups and craft items, toys etc. Cleaning products such as Milton, Wipes, glass cleaner (I wouldn't clean my doors half as much if I were not a childminder) Don't forget any parking fees which you occur when on childminding business. Toilet rolls, kitchen rolls. £5 per child for food (average depends on hours) and not forgetting the percentage off household bills. So, yes I think that if you had £10,000 a huge amount of that would have gone on expendeture.

[Ripeberry]

Where do you put the 40p per mile for travel? Is it just in the travel column of the NCMA account book? How would you show evidence of your mileage?
Also, what if you have a P/T job that is using up your tax free allowance, does it mean that everything you earn as a CM is taxed straight away and at a higher rate?
My evening w/kend job earns me just under £8000 a year so if I still have my mindees for a year I've worked out the most I would earn is £5,000 a year before expenses and tax.
Do I have to pay the 40% band? Can't you tell I don't like the money side of all this? :(

[TheBTeam]

Dont have time to type loads, but the 40% tax band doesn't kick in until your earnings are in the £30ks

[Mari]

I don't show evidence of my mileage really, but I record my outings in my diary and that's how I know I have been somewhere. Also receipts can back this up if the Tax man wants to be petty. But we do not have to show receipts for anything under £10 if we don;t have them.

As for the tax return, you have to record the earnings from your PT job, then record the net profit from childminding, add them together and then deduct 6,100?? or there abouts and that is your taxable amount. (something llike that anyhow):panic:

[nic76]

think i need an accountant.lol

if i claim household bills ie electric etc will i have to pay business rates on my water etc if i use my home for the business?????

[Chatterbox Childcare]

Where do you put the 40p per mile for travel? Is it just in the travel column of the NCMA account book? How would you show evidence of your mileage?
Also, what if you have a P/T job that is using up your tax free allowance, does it mean that everything you earn as a CM is taxed straight away and at a higher rate?
My evening w/kend job earns me just under £8000 a year so if I still have my mindees for a year I've worked out the most I would earn is £5,000 a year before expenses and tax.
Do I have to pay the 40% band? Can't you tell I don't like the money side of all this? :(

Your part time job will use all of your allowance and then you will pay tax on the balance of approx £2000. Your childminding is entered separately on the return but you will pay tax and ni on this so I would say put away 25% to be safe.

[LittleMissSparkles]

I'm not sure i agree with Debbie about paying tax.... my accountant does it so i pay very little tax which i preferto paying the taxman hundreds/thousands of pounds, itmightlook on paper likei dont earn much but i knowi do xxx

[Chatterbox Childcare]

I'm not sure i agree with Debbie about paying tax.... my accountant does it so i pay very little tax which i preferto paying the taxman hundreds/thousands of pounds, itmightlook on paper likei dont earn much but i knowi do xxx

But you have a tax allowance to use up and the part time job currently being done will use all of that so if a profit is made then tax will be charged from the start and of course NI Class 4 too.

[LittleMissSparkles]

But you have a tax allowance to use up and the part time job currently being done will use all of that so if a profit is made then tax will be charged from the start and of course NI Class 4 too.


I just meant for me personally x

[nic76]

I'm not sure i agree with Debbie about paying tax.... my accountant does it so i pay very little tax which i preferto paying the taxman hundreds/thousands of pounds, itmightlook on paper likei dont earn much but i knowi do xxx

out of interest how much will an accountant cost? i would much rather give someone all my paper work/reciepts and let them do it????

[LittleMissSparkles]

out of interest how much will an accountant cost? i would much rather give someone all my paper work/reciepts and let them do it????


mine charges £69 for the year, well worth it in my view and it means i know its done right and i dont have to pull my hair out trying to do it myself or find the time to do it x

[nic76]

mine charges £69 for the year, well worth it in my view and it means i know its done right and i dont have to pull my hair out trying to do it myself or find the time to do it x

thats cheaper than i thought. i know someone who charged £250 for the year, i didnt use them but a friend used to.

can you pm me who you use

thanks

[Chatterbox Childcare]

I just meant for me personally x

sorry re read again this morning - I need to stop reading late at night!