QUESTIONS regarding tax return (1st time...!)
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  1. #1
    Hollyhock Guest

    Default QUESTIONS regarding tax return (1st time...!)

    Hi,

    I'm trying to sort out my very first tax return and, in spite of having read various very helpful guidelines, I still have a few questions. If any of you could answer some, I would be so grateful!
    I am using the fabulous worksheet by happytoddlers:

    - how do I list all the purchases for which I don't have a receipt (e.g. bought on gumtree)?

    - how precise do I need to list food expenses? Do I have to divide the cost of a pack of flour into portions of bread etc...?? (it seems silly to me, but it's the first time I'm doing this...)

    - there are 3 shifts on the spreadsheet - is this possibly not relevant for everybody and if so, can I just use one of the three columns, and ignore the other two?

    - in the column "receipt number", do I just number the receipts (1, 2, 3...) or do I have to enter some number that can be found on a receipt...? (I told you it's the first time I'm doing this!)

    - where do I have to list the start-up grant money?

    - do I have to list money I was given/lent by my friends and my parents?

    - how do I list up the monthly rent (amongst expenses I assume, but what do I write into "receipt"? I don't get a receipt from my landlord, and I pay cash)?

    - how do I lest wear and tear (I read it's 10% that we can claim)?

    - the first sessions I was paid for in cash, and unfortunately didn't keep any records...will my (signed) attendance register suffice to show how many hours I was paid for?

    - does the time spent cleaning up, planning, shopping, cooking and baking in preparation as well as paperwork count as work hours, or not? I found varying advice regarding this (I think in one of the HMRC webinars it was said that work time does include the above).

    - I'm going to fill out the online tax return. Will I have to attach digital photographs of all the receipts??
    Last edited by Hollyhock; 11-01-2018 at 04:18 PM.

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    Hello!

    I don't use happytoddlers spreadsheet, so I can't help you there ... but I will try!

    * anything I buy, if I don't have a 'proper' receipt for it, then I either write one/ask the person I am buying off for one, or I write it on a slip of paper, date and sign it myself and add it to my accounts file for that week/month.

    * when I started doing my accounts, I did work out food portions/costs, but over time, I've got better at working out what I buy/use for minded children. it might be - I buy 2 loaves of bread ..one for my family and one for minded children etc

    * I don't number my receipts as I store mine in weekly envelopes ( different system ) but I would presume that you number the receipt yourself.

    * start up grant money would be classed as income

    * I don't think you'd list money lent/given, unless in paying it back, you are putting those payments in your accounts.

    * I would most definitely be asking for a receipt for rent paid from a landlord, irrespective of cash or not. I don't know how you claim rent/proportion of rent. sorry.

    * wear and tear 10% I do at the end of the whole income year ... so I add up all my income, and then take off 10% for wear & tear. this then leaves the income from which I take off my expenses.

    * I guess your register will show how many hours you worked, and that therefore, you will be able to work out what you were paid, in order to put that down in your 'income' list.

    * sadly, I've always been told that we can not include preparation/paperwork hours in our work hours. I'd be grateful to know otherwise for sure!

    * you don't need to attach anything to your online self assessment. just store everything, and a copy of your filed tax return, and then, should HMRC wish to do an audit, then you have all the details to hand.


    good luck. once you've done a couple, they become much easier!

    x

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    Quote Originally Posted by Hollyhock View Post
    Hi,

    I'm trying to sort out my very first tax return and, in spite of having read various very helpful guidelines, I still have a few questions. If any of you could answer some, I would be so grateful!
    I am using the fabulous worksheet by happytoddlers:

    - how do I list all the purchases for which I don't have a receipt (e.g. bought on gumtree)?
    I would print off the advert, highlight the payment on my bank statement, and attach that to my accounts for that year

    - how precise do I need to list food expenses? Do I have to divide the cost of a pack of flour into portions of bread etc...?? (it seems silly to me, but it's the first time I'm doing this...)
    This is entirely up to you, as HMRC say they accept 'reasonable costs' for food. However you work it out, make sure you keep the receipts and your working out showing how you arrived at that figure with your accounts.
    Personally, every few months (as costs fluctuate) I take my shopping receipt, pick a day, and calculate the food costs for the whole day to establish the meal cost, highlighting the ingredients on the receipt.
    So everything needed for breakfast: 1/3rd of the cost of the cereal as that lasts 3 days, cost of the milk used, cost of bread used, approximate amount of butter used, add all the costings together, then divided between the amount of people served = individual breakfast cost per person
    A glass of juice for example:juice costs xx amount per bottle, the bottle says xx servings so, cost divided by servings = amount claimed per drink
    Lunch and tea: cost of all ingredients used to make the meal, divided by the amount of people served
    Things like, a tsp of fennel seeds, I'll put down at 2p, yes, it's a small amount, but it soon adds up over the cost of the whole meal.

    I will then use the figures for each meal that day as my price claimed for each meal until the next time I recalculate


    - there are 3 shifts on the spreadsheet - is this possibly not relevant for everybody and if so, can I just use one of the three columns, and ignore the other two?
    Sorry, don't use the spreadsheet so can't help here

    - in the column "receipt number", do I just number the receipts (1, 2, 3...) or do I have to enter some number that can be found on a receipt...? (I told you it's the first time I'm doing this!)
    Generally, in accounting terms, the receipt number is normally the number on your receipt, or the last few digits. This is so, should you be audited, the tax man can tie in the actual supplier receipt to the entry in your accounts, this is more relevant to business that are vat registered or ltd co's really, to ensure they are calculating their returns accurately.
    If you wish to number your receipts 1,2,3.... you can do that also, however, when you come across a receipt you forgot about lying in the bottom of your bag/car/pocket, you would have to enter it in your accounts in number sequence rather than date sequence. It's not an issue to do it, just to be aware that when you check things later you've done it that way lol


    - where do I have to list the start-up grant money?
    I'm not familiar with the system you use, however, it's an income, so will go either in an income entry or a specific grant column. If you're putting it in an 'income' column, make sure you note in a 'description' or supplier column, that it is a start up grant.
    You won't be taxed on the grant amount as the purchases you make will cancel out the amount received


    - do I have to list money I was given/lent by my friends and my parents?
    That depends, was it lent to you prior to becoming self employed, or since you've become self employed?

    - how do I list up the monthly rent (amongst expenses I assume, but what do I write into "receipt"? I don't get a receipt from my landlord, and I pay cash)?
    Rent is a percentage based on the amount of hours worked, as is, gas, electric, council tax and water rates, not the full amount.
    Presumably you have some sort of rent book, statement, or other means of proving you're paying your rent? Evidence would be required if you were audited,
    that you have been paying and therefore claiming the correct amount


    - how do I lest wear and tear (I read it's 10% that we can claim)?
    Wear and tear is 10% and would be listed as an expense

    - the first sessions I was paid for in cash, and unfortunately didn't keep any records...will my (signed) attendance register suffice to show how many hours I was paid for?
    So long as you have entered all cash payments into your accounts income, you should be fine

    - does the time spent cleaning up, planning, shopping, cooking and baking in preparation as well as paperwork count as work hours, or not? I found varying advice regarding this (I think in one of the HMRC webinars it was said that work time does include the above).
    For your business accounts no, any unpaid hours do not get counted into your allowable percentages. For claiming tax credits/benefits/etc,
    yes, you can use unpaid hours as 'working hours'
    Hope that clarifies the reason there's varying advice lol


    - I'm going to fill out the online tax return. Will I have to attach digital photographs of all the receipts??
    No, you will not have to provide any physical evidence when submitting your accounts, however, you must keep all relevant information on how you arrived at the declared figures, for a period of 6 years, in case you're chosen to be audited in the future
    [/QUOTE]

    Hope that helps
    Last edited by Kiddleywinks; 12-01-2018 at 12:10 PM.

  5. #4
    Hollyhock Guest

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    Quote Originally Posted by loocyloo View Post
    Hello!

    I don't use happytoddlers spreadsheet, so I can't help you there ... but I will try!

    * anything I buy, if I don't have a 'proper' receipt for it, then I either write one/ask the person I am buying off for one, or I write it on a slip of paper, date and sign it myself and add it to my accounts file for that week/month.

    * when I started doing my accounts, I did work out food portions/costs, but over time, I've got better at working out what I buy/use for minded children. it might be - I buy 2 loaves of bread ..one for my family and one for minded children etc

    * I don't number my receipts as I store mine in weekly envelopes ( different system ) but I would presume that you number the receipt yourself.

    * start up grant money would be classed as income

    * I don't think you'd list money lent/given, unless in paying it back, you are putting those payments in your accounts.

    * I would most definitely be asking for a receipt for rent paid from a landlord, irrespective of cash or not. I don't know how you claim rent/proportion of rent. sorry.

    * wear and tear 10% I do at the end of the whole income year ... so I add up all my income, and then take off 10% for wear & tear. this then leaves the income from which I take off my expenses.

    * I guess your register will show how many hours you worked, and that therefore, you will be able to work out what you were paid, in order to put that down in your 'income' list.

    * sadly, I've always been told that we can not include preparation/paperwork hours in our work hours. I'd be grateful to know otherwise for sure!

    * you don't need to attach anything to your online self assessment. just store everything, and a copy of your filed tax return, and then, should HMRC wish to do an audit, then you have all the details to hand.


    good luck. once you've done a couple, they become much easier!

    x

    Thank you very much!!

  6. #5
    Hollyhock Guest

    Default

    - do I have to list money I was given/lent by my friends and my parents?
    That depends, was it lent to you prior to becoming self employed, or since you've become self employed?

    Thanks so much!
    The money was lent to me during the registration process, before I started trading.

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    I do use the spreadsheet by Happytoddlers, regarding the 3 shift options - I just put my start time 8:00 in the Start time on Shift 1 (make sure you use the double dot in middle as I have done or it won't accept your figures) then I put my finish time 17:30 in the End time of Shift 3 and it calculates the hours - I think the other options are there for children that maybe come before and after pre-school or school and don't apply to me - maybe they do to you. As long as you have some children between the start and end time it doesn't really matter who goes to school when as it's only to calculate how many hours you work (are contracted for) each week so it can calculate what percentage of your utility bills you qualify for.

    It's based on how many hours you are contracted for so you shouldn't put in the time you spend getting ready in the morning or cleaning up at end of day - it's contact time with children.

    I don't bother numbering my invoices, I just put them in month order. I think other people have answered questions about expenses without receipts - I do a paper copy rather than on line but I don't think you have to send in digital photos of receipts - just put them somewhere safe in case you are every inspected by Tax man.

    You don't need to enter anything for Wear and Tear - this is taken off automatically (see the tab/page FY Summary) Tax Return Output - it will list your Gross Income and then underneath it says Wear and tear and it calculates the 10% for you.

  8. #7
    Hollyhock Guest

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    Thant's very helpful - thanks a lot!

 

 

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