tax credit for contract

[jadavi]

HI, when agreeing the contract and paying the first months fee, does the parent have to cover whole cost and then get reimbursed by tax credit 70% ? I know my single mum parent won't be able to afford this as it's around £700 up front but only £200, her contribution..... How do people do it? Can I take her 30% for the month and then accept the 70 % when it comes in?
Does it come in quickly? Do people usually set up a standing order of 100% of the amount?

Advice appreciated...I dont want to freak out my first client!
cheers,
jac

[gigglinggoblin]

Tax credits go to the parent, not you. It is not up to you to ensure parent gets them, it is up to the parent to pay you according to the terms of the contract. Tax credits or any other method of them aquiring the money is up to them. Your business, your rules. Go with what you are comfortable with. Lots of people have had their fingers burnt not taking payment upfront and will insist on it, you wouldnt be alone in doing so. If you choose to wait for the 70% until she gets it you are at risk of being told it hasnt arrived or whatever and being left without pay.

[jadavi]

Thank you. Once she requests tax credit is it normally quite quick?

[rosebud]

Its parents responsibility to pay the fees and they should pay in advance. In this situation where the parent really can't pay the full month up front (£700 is a lot to find if only just going back to work) then I would probably ask for two weeks and then start charging monthly from there, alternatively I might offer for them to pay weekly to begin with but always in advance. Its up to you how you do it just be careful not to be too generous. Also its useful to remember that we never really know a parents full financial situation and we can't guarantee that tax credits will be paying the full 70% available.

[gigglinggoblin]

Thank you. Once she requests tax credit is it normally quite quick?

I would tell her to call the helpline, they should be able to give her a better idea. I dont know if any of my parents have ever claimed them.

[Goatgirl]

Hi :),
In this situation, I usually give parents the benefit of the doubt and just ask them for weekly payments in advance for up to 6 weeks. In my experience, tax credits have been sorted out much earlier ; 3 or 4 weeks.

I did have one parent though, who I did this for and then she admitted she'd got the backdated credits but spent them and thought as I'd been taking weekly payments it would just be fine to continue! :rolleyes:

Make sure you're clear about everything financial. I'd get it in writing too.

Hope you can come to an arrangement that suits you both. At the end of the day its your business and your decision :thumbsup:

best wishes,
Wendy :)