TAX RETURN PROBLEM

[k6nkm]

Hi all
I think I have made a huge mistake with my first tax self assessment. I thought I was organised and did it in May last year but now I think I have put wrong figures in. In my monthly expenses I give myself a wage each week depending on the number of children I have and for how long I have them. If I dont give myself a wage Im making hardly anything once expenses are taken off which isn't worth my while putting all the hours in for nothing. When I did my tax return I put my figures in for wages being an expense but now I have realised that I should have not took a wage each week. Im really struggling to get my head around this. I am usually really good with accounts and stuff but it's all new to me I dont know what you can and can't have as expenses. Could anyone advise me what to do? I have already submitted my tax return but now Im going have to make changes to it once I know what to do.
Thanks

[Chatterbox Childcare]

You should have an income and expenditure figure

I.e. Income £2000 expenses £1500

How have you entered it as self employed and employed?

[k6nkm]

No i have entered it as self-employed but I have taken a wage each month and recorded it as a tax deductable. My income figures are correct its just the expenses figure. I think I will have to take the wages figures off each month and put my new figure I get as my expenses. That should then calculate my tax accurately I think. When I take my expenses off my income each month that will leave me with my wage at the end of it which will mean my income will be different every month. Does any other childminders take a wage or just take whats left after expenses?

[christine e]

We are self employed so we just have what is left after expenses

Cx

[christine e]

We are self employed so we just have what is left after expenses - I would give HMRC a call and explain your mistake and ask if someone from their small business team could come out and visit you

Cx

[Pauline]

What is left after your expenses is yours and is your income for tax assessment. If the figure is less than the tax threshold then you pay no tax, if it is more then you pay tax on the amount over the threshold.

So 'technically it is your 'wage' but a childminder should not take a wage as such and put it as an expense, as you have realised, it is simply the amount left after expenses that is yours to keep.

The tax office would be very understanding if you explain your error and it is possible to correct a tax return even after it has been submitted, not sure for how long after but I have read it is possible.

[Pauline]

Here you go this might help you:

http://www.hmrc.gov.uk/sa/correct-repay.htm

[k6nkm]

Does anyone have a list of things you can claim as expenses? I think I could proberly claim a lot more of what I have claimed.

[Pauline]

If you go to the top of the Forum, there is a link called "Free Resources" (little faces across the top)

Click that and go to Free Downloads on one of the tabs and then scroll down the left side to a tax section, there is a booklet in there with tax advice plus some information that Sarah wrote.

[k6nkm]

Thank you very much for the advice. I will make the adjustments to my accounts then amend my tax return online then call them and explain what happened.

I have recently moved house and the garden is unsecure next to the road. This summer I am going to put a fence up. My local council is giving me a small grant towards it but the fence will cost about £800 for the materials and my husband is a joiner so he will build it. Can I put the whole £800 for materials through as expenses? The fence wouldnt be getting put up if I wasnt a childminder.

[christine e]

Thank you very much for the advice. I will make the adjustments to my accounts then amend my tax return online then call them and explain what happened.

I have recently moved house and the garden is unsecure next to the road. This summer I am going to put a fence up. My local council is giving me a small grant towards it but the fence will cost about £800 for the materials and my husband is a joiner so he will build it. Can I put the whole £800 for materials through as expenses? The fence wouldnt be getting put up if I wasnt a childminder.

You will need to put the grant through as income if you do

Cx

[MrAnchovy]

Thank you very much for the advice. I will make the adjustments to my accounts then amend my tax return online then call them and explain what happened.

I have recently moved house and the garden is unsecure next to the road. This summer I am going to put a fence up. My local council is giving me a small grant towards it but the fence will cost about £800 for the materials and my husband is a joiner so he will build it. Can I put the whole £800 for materials through as expenses? The fence wouldnt be getting put up if I wasnt a childminder.

You don't need to call them, just amend your return on line (you will only be able to do this if you originally submitted it on line though). Do this next week so you meet the 31 January deadline for correctly reporting your tax liability.

You cannot put any of the cost of the fence through I am afraid, but you do not have to count the grant from the council as income either.

[ManicMum]

You may also need to contact Tax Credits too as the figures will now have changed. Their deadline for 10/11 income is also the 31st January.

When you first go self employed it is a nightmare. I still have to refresh my memory every year when I do the tax return. It's the worse bit in my mind, all the paperwork.

[Chatterbox Childcare]

You don't need to call them, just amend your return on line (you will only be able to do this if you originally submitted it on line though). Do this next week so you meet the 31 January deadline for correctly reporting your tax liability.

You cannot put any of the cost of the fence through I am afraid, but you do not have to count the grant from the council as income either.

Mr A I disagree with this and we have been told in the past that childminders can claim part of this as it is part of our registration to Safeguard Children

Might be worth a call to the HMRC to get it directly from them

[MrAnchovy]

Actually, I'm going to disagree with myself here - thanks Debbie for making me think again Expenditure on a fence can sometimes be considered Plant and Machinery and therefore claimable as Annual Investment Allowance.

If the fence is there to stop children running out into the road it is clearly performing a business function (keeping mindees safe). For more about this see here.

If the fence is there for personal security purposes i.e. to prevent unauthorised persons from coming into contact with children, rather than just to protect the premises from intruders (this is unlikely to apply to fences, but it could apply to a lockable side gate for instance) it may qualify under these provisions.

But if the fence is there to provide a boundary to your property, or to keep a dog out of the area of your garden used by children, or to enclose a space in which you carry out business functions (as opposed to carrying out a business function itself) it will not in general be Plant and Machinery so cannot be claimed.

You should take the amount of the grant off the total cost and claim the balance.

[Chatterbox Childcare]

[QUOTE=MrAnchovy;1041346]Actually, I'm going to disagree with myself here - thanks Debbie for making me think again Expenditure on a fence can sometimes be considered Plant and Machinery and therefore claimable as Annual Investment Allowance.

If the fence is there to stop children running out into the road it is clearly performing a business function (keeping mindees safe). For more about this see here.

If the fence is there for personal security purposes i.e. to prevent unauthorised persons from coming into contact with children, rather than just to protect the premises from intruders (this is unlikely to apply to fences, but it could apply to a lockable side gate for instance) it may qualify under these provisions.

But if the fence is there to provide a boundary to your property, or to keep a dog out of the area of your garden used by children, or to enclose a space in which you carry out business functions (as opposed to carrying out a business function itself) it will not in general be Plant and Machinery so cannot be claimed.

You should take the amount of the grant off the total cost and claim the balance.[/QUOTE]

Sorry going to challenge again - I was told for income to include everything and then put the expense in, getting 10% wear and tear on the lot