Simplified accounting

**dizzyalice** · 13-01-2015, 08:03 PM

Hi, has anyone read HMRc's new rules on simplified accounting where instead of checking through all of your bills, you can just charge a flat rate to your expenses depending on how many hours a month you work? I think that's right. . . .but just wanted to check it out.

I have a spreadsheet with all formulae ready to go with the childminding rates but need to trawl through all my bills and apportion and thought this might be better!

**Kiddleywinks** · 14-01-2015, 07:18 AM

Yes that's correct.

In the downloads, there is a document to help explain what you can claim for. On page 11 it shows the percentages based on the hours you work
http://www.childmindinghelp.co.uk/fr...nformation.pdf

Be aware though, that it is ACTUAL hours worked, not CONTRACTED hours

**Smileyface** · 14-01-2015, 09:38 AM

Thank you for sharing x

**dizzyalice** · 14-01-2015, 01:43 PM

Hi

Thanks for the info however what I was referring to was the 3rd paragraph in this HMRC document
BIM52751 - Care providers: childminders: expenses

If you click the link bim75000, and then click the link 'use of home for business purposes', it states that instead of using the apportioned %, that depending on the hours you work, you can just charge a flat rate, so if working 160 hours a month, the expenses to be charged are £26 per month.

I am doing my friends accounts and she is struggling to pull off her elec and gas bills and so thought I could do it this way with the new rules.

**hectors house** · 14-01-2015, 03:35 PM

Originally Posted by dizzyalice

Hi

Thanks for the info however what I was referring to was the 3rd paragraph in this HMRC document
BIM52751 - Care providers: childminders: expenses

If you click the link bim75000, and then click the link 'use of home for business purposes', it states that instead of using the apportioned %, that depending on the hours you work, you can just charge a flat rate, so if working 160 hours a month, the expenses to be charged are £26 per month.

I am doing my friends accounts and she is struggling to pull off her elec and gas bills and so thought I could do it this way with the new rules.

Thanks will take a look later

**dizzyalice** · 14-01-2015, 05:02 PM

Some more info here

Key messages from HMRC for childminders | SCMA News

**moggy** · 14-01-2015, 06:15 PM

Doesn't look like a good deal to me- https://www.gov.uk/simpler-income-ta...king-from-home

Flat rate (excludes phone/internet) for working over 101 hours per month at home = £26 per month expenses
x 12 months = £312

But by using Pacey account book and following the % of gas/elec/council tax/water mine came to
£549 for 12 months gas/elec/council tax/water expenses

So this flat rate would lose me quite a lot of eligible expenses.
Do others find it works out like that?

Or does the flat rate not include all gas, elec, council tax and water?

**dizzyalice** · 14-01-2015, 07:30 PM

Mmm, that's interesting. This is where I was a little confused as I wasn't sure if it would include council tax or not in which case you could claim £312 plus council tax (which I guess would still not be beneficial to you, but maybe others)

In one of the HMRC docs, it says 'Use of the flat rate deduction for heat, light, power, telephone and internet / broadband does not prohibit a separate deduction for fixed costs such as council tax, insurance and mortgage interest, where an identifiable proportion can be attributed to business use' which to me means that you claim separately for council tax (and even water)??

Just need some clarification

**moggy** · 14-01-2015, 09:08 PM

Originally Posted by dizzyalice

Mmm, that's interesting. This is where I was a little confused as I wasn't sure if it would include council tax or not in which case you could claim £312 plus council tax (which I guess would still not be beneficial to you, but maybe others)

In one of the HMRC docs, it says 'Use of the flat rate deduction for heat, light, power, telephone and internet / broadband does not prohibit a separate deduction for fixed costs such as council tax, insurance and mortgage interest, where an identifiable proportion can be attributed to business use' which to me means that you claim separately for council tax (and even water)??

Just need some clarification

If I did not include Council Tax, my Pacey Account book method would give £389 expenses for Gas/elec/water.
If I did not include Council Tax or Water, my Pacey Account book method would give £334 expenses for Gas/elec only...
Compared to £312 for the Flat Rate method...

Doesn't add up to me!

And if it is only for gas/elec then it really isn't saving much time!
I have both gas and elec from one suppler who give a total energy bill which is easy to work out the % from once a year (my working hours are very stable over the year so I just do the % once at the end of the year)

Flat Rate method: I am not convinced at all!

**dizzyalice** · 14-01-2015, 10:21 PM

Thanks Moggy, I'll be chasing my friend up for her bills then!

**Lal** · 15-01-2015, 09:47 AM

Sorry to sort of hijack the thread but is it a proportion of total gas and electric we claim for or just the heating and lighting costs?

**moggy** · 15-01-2015, 01:19 PM

Originally Posted by Lal

Sorry to sort of hijack the thread but is it a proportion of total gas and electric we claim for or just the heating and lighting costs?

No way to separate elec used for lighting from elec for appliances etc.
No way to separate gas used for heating from gas used for cooking.

TBH, I have never thought about the words 'heating and lighting' rather than 'gas and electric'.
I have always done % of total gas and electric.

How do others do it?

**loocyloo** · 15-01-2015, 01:21 PM

Originally Posted by moggy

No way to separate elec used for lighting from elec for appliances etc.
No way to separate gas used for heating from gas used for cooking.

TBH, I have never thought about the words 'heating and lighting' rather than 'gas and electric'.
I have always done % of total gas and electric.

How do others do it?

I just do a % of total gas and electric too.

**Lal** · 15-01-2015, 11:18 PM

Thanks- I was trying to figure out how I would work out how much of electric bill was lighting.

**moggy** · 16-01-2015, 08:34 AM

Originally Posted by Lal

Thanks- I was trying to figure out how I would work out how much of electric bill was lighting.

In the Pacey/NCMA account book there is a sample page filled in to show how to do it and in the Lighting/heating column they enter 'gas and electric'! so it is just a mix up of words.

**hectors house** · 16-01-2015, 08:58 AM

Originally Posted by moggy

In the Pacey/NCMA account book there is a sample page filled in to show how to do it and in the Lighting/heating column they enter 'gas and electric'! so it is just a mix up of words.

I guess people may have different forms of heating - gas, electric, oil, liquid gas, solid fuel - but never really thought about the term "heating and lighting" - I have always just converted the words in my head to be Gas & electric.

**lollipop kid** · 16-01-2015, 03:06 PM

I just wanted to add that, as I understand from the attached gov uk link, then a proportion of Mortgage Interest based on the rooms used is allowable as an expense. If I've got this wrong, please would someone let me know? (I've always claimed it on my tax returns on the basis of rooms used as a % of my property; over % of day I use these (e.g. 7am-7pm is 12 hours, so 50%), multiplied by the number of days worked during the tax year.)

https://www.gov.uk/expenses-if-youre...loyed/overview

Many thanks,

L

**JLG** · 17-01-2015, 06:33 PM

Originally Posted by lollipop kid

I just wanted to add that, as I understand from the attached gov uk link, then a proportion of Mortgage Interest based on the rooms used is allowable as an expense. If I've got this wrong, please would someone let me know? (I've always claimed it on my tax returns on the basis of rooms used as a % of my property; over % of day I use these (e.g. 7am-7pm is 12 hours, so 50%), multiplied by the number of days worked during the tax year.)

https://www.gov.uk/expenses-if-youre...loyed/overview

Many thanks,

L

I think this only applies if you use part of your house exclusively for your childminding business and then if you claim for this you could be liable for capital gains tax when you sell it!

**dizzyalice** · 20-01-2015, 01:38 PM

I hadn't actually thought of that - I haven't taken into account the % use of rooms at all . . . .?? Nor included mortgage interest . . maybe I'm missing something . . .

**moggy** · 20-01-2015, 01:49 PM

Originally Posted by dizzyalice

I hadn't actually thought of that - I haven't taken into account the % use of rooms at all . . . .?? Nor included mortgage interest . . maybe I'm missing something . . .

Claiming a % of mortgage interest is a complicated area, it was well discussed here:

http://www.childmindinghelp.co.uk/fo...-mortgage.html

and the conclusion was get expert advise.

It is to do with knowing the % of the house exclusively used for CM and for what hours (so none of your own children there)... I have never tried calculating it myself.