Working tax credits changes
Thanks Thanks:  0
Likes Likes:  9
Dislikes Dislikes:  0
Page 1 of 2 12 LastLast
Results 1 to 20 of 24
  1. #1
    Join Date
    Dec 2006
    Location
    Cheshire
    Posts
    37,500
    Registered Childminder since
    1994
    Latest Inspection Grade
    Outstanding
    Post Thanks / Like
    Blog Entries
    21

    Default Working tax credits changes

    Please can you reply to this thread IF you are affected by or might be affected by the changes to Working Tax Credits and/or if you have received a letter telling you to produce information for WTC and/or if you are worried about how the WTC changes will affect you financially.

    This is not about HMRC checking tax credits claims - or about people defrauding tax credits - this is about childminders receiving long letters telling them to provide evidence of how they are growing their businesses ...

    We are going to try and get help for members who are being affected by the changes - we are writing guidance to help you respond to the letter and talking to the big early years magazines on your behalf and we have approached the main childminder organisations to see if they can advise.

    It would be helpful if you could let us know what's happening out there please.

    Thank you

  2. #2
    Join Date
    Mar 2009
    Location
    In LaLa Land
    Posts
    3,598
    Registered Childminder since
    Sept 09
    Latest Inspection Grade
    Good
    Post Thanks / Like

    Default

    This is the first I have heard of anything like this??? I haven't received any letter from them yet though but I do know that if they cut tax credits I will not survive on the income I receive from doing this

    xx

  3. #3
    Join Date
    Oct 2008
    Posts
    7,786
    Registered Childminder since
    oct 02
    Latest Inspection Grade
    outstanding
    Post Thanks / Like
    Blog Entries
    8

    Default

    I haven't had anything or heard anything about it at all.

  4. #4
    Simona Guest

    Default

    From April 2016 WTC will change and affect self employed people including CMs...if you have an accountant you should discuss this with him/her

    It may be worth cms taking time to read this Revenue and Custom Brief 7 (2015) from the HMRC which was recently put on the .Gov website

    These are some of the extracts (in bold)

    From 6 April 2015, all new claimants who are using self-employed work to meet the qualifying remunerative work test for WTC, must show that they are trading on a commercial basis and their business is done with a view to achieving profits. The self-employment should also be structured, regular and ongoing. For example, if their business activity is a hobby it is not likely to be considered commercial or have an expectation of realising a profit.

    These checks are about ensuring HM Revenue and Customs (HMRC) only pay tax credits to those who are entitled. WTC will continue to support those who are carrying on a genuine business activity. These changes will not affect the rules for claiming Child Tax Credit.

    [B]Self-employed WTC claimants with earnings below a threshold (this will be based on working hours and the National Minimum Wage) will be asked by HMRC to provide evidence that they are in a regular and organised trade, profession or vocation on a commercial basis and with a view to achieving a profit.

    The information we ask for should be available as part of normal business activity, for example receipts and expenses, records of sales and purchases. We may also ask for supporting documents such as a business plan, planned work, cash flow and profit projections
    For more information look at this link and save it for future reference

    https://www.gov.uk/government/public...ing-tax-credit.

    maybe worth reviewing your business and sustainability in time for April to meet these changes if they affect you.

    Good luck!

  5. #5
    Join Date
    Feb 2009
    Location
    Northern Ireland
    Posts
    804
    Registered Childminder since
    sept 07
    Post Thanks / Like

    Default

    I got a letter last week saying they may look at my books as I need to be making a profit in their eyes
    Tess1981

  6. #6
    Join Date
    Mar 2009
    Location
    In LaLa Land
    Posts
    3,598
    Registered Childminder since
    Sept 09
    Latest Inspection Grade
    Good
    Post Thanks / Like

    Default

    Quote Originally Posted by tess1981 View Post
    I got a letter last week saying they may look at my books as I need to be making a profit in their eyes
    Surely any income we quote to them is profit isn't it?? Or am I missing something here

    xx

  7. #7
    Join Date
    Jan 2009
    Location
    in the never never land fighting off fae
    Posts
    6,991
    Registered Childminder since
    july05
    Post Thanks / Like
    Blog Entries
    9

    Default

    Quote Originally Posted by AliceK View Post

    Surely any income we quote to them is profit isn't it?? Or am I missing something here

    xx
    Yes but what they are saying it's not enough profit
    When someone tells you nothing is impossible, tell them to go slam a revolving door

  8. #8
    Join Date
    Mar 2009
    Location
    In LaLa Land
    Posts
    3,598
    Registered Childminder since
    Sept 09
    Latest Inspection Grade
    Good
    Post Thanks / Like

    Default

    Quote Originally Posted by FussyElmo View Post
    Yes but what they are saying it's not enough profit
    Oh I see.
    Well so they want "affordable" childcare for parents but we as childminders are not making enough profit. I wonder what figure they are going to put on it then - the min acceptable profit.
    Maybe we should all double our prices or something so that we make more profit

    xx

  9. Likes gef918 liked this post
  10. #9
    Join Date
    Jan 2009
    Location
    in the never never land fighting off fae
    Posts
    6,991
    Registered Childminder since
    july05
    Post Thanks / Like
    Blog Entries
    9

    Default

    Quote Originally Posted by AliceK View Post

    Oh I see.
    Well so they want "affordable" childcare for parents but we as childminders are not making enough profit. I wonder what figure they are going to put on it then - the min acceptable profit.
    Maybe we should all double our prices or something so that we make more profit

    xx
    I think and don't quote me they are expecting for SE people to earn the equivalent to 37 hours at min wage
    When someone tells you nothing is impossible, tell them to go slam a revolving door

  11. #10
    Join Date
    Feb 2012
    Posts
    257
    Registered Childminder since
    July 12
    Post Thanks / Like

    Default

    Quote Originally Posted by FussyElmo View Post
    I think and don't quote me they are expecting for SE people to earn the equivalent to 37 hours at min wage
    This is what I was thinking. I work 50 hours + per week and earn nowhere near NMW. It's a real worry. What would the government prefer? We all give up work?!!

  12. #11
    Join Date
    Mar 2009
    Location
    In LaLa Land
    Posts
    3,598
    Registered Childminder since
    Sept 09
    Latest Inspection Grade
    Good
    Post Thanks / Like

    Default

    Quote Originally Posted by JoRo163 View Post
    This is what I was thinking. I work 50 hours + per week and earn nowhere near NMW. It's a real worry. What would the government prefer? We all give up work?!!
    Same here. 50 hrs per week and I would love to be earning the NMW for that but it's not gonna happen any time soon

    I just did a quick calculation and I would need 3 x full-time children each paying £4.50ph to hit what they are wanting then. Now where to get the equivalent of 3 x FT children. I'd better start looking.

    xx

  13. #12
    Join Date
    Jan 2013
    Posts
    208
    Registered Childminder since
    Feb 13
    Post Thanks / Like

    Default

    It's not something I've heard about. It sounds like they are trying to push people into better earning jobs. Unfortunately, if all the childminders have to quit to look for new work who on earth will look after the children!

  14. Likes Kiddleywinks liked this post
  15. #13
    Join Date
    Oct 2014
    Location
    Norfolk
    Posts
    69
    Registered Childminder since
    Mar 15
    Post Thanks / Like

    Default

    when Universal Credit replaces many benefits, the will work payments out 'on what they are expecting for SE people to earn the equivalent to 37 hours at min wage'. So everyone who has been pushed into SE will now find out they aren't entitled to a thing to support their low incomes. See this link, very worrying: Universal Credit and the self employed | Universal Credit

  16. #14
    Join Date
    Feb 2009
    Location
    Northern Ireland
    Posts
    804
    Registered Childminder since
    sept 07
    Post Thanks / Like

    Default

    Quote Originally Posted by AliceK View Post

    Oh I see.
    Well so they want "affordable" childcare for parents but we as childminders are not making enough profit. I wonder what figure they are going to put on it then - the min acceptable profit.
    Maybe we should all double our prices or something so that we make more profit

    xx
    I had to laugh at this. You are so right.
    They want us to make a huge profit so they probably don't have to give us tax credits yet everyone and their granny wants childcare for peanuts...
    Best of all prices over the water here are A lot less that in England. So we make even less...
    What I earn makes me a profit but is also under the tax threshold and I also get tax credits. If I earn more I lose tax credits it's explaining that to them lol
    Tess1981

  17. Likes AliceK liked this post
  18. #15
    Simona Guest

    Default

    Quote Originally Posted by AliceK View Post
    Oh I see.
    Well so they want "affordable" childcare for parents but we as childminders are not making enough profit. I wonder what figure they are going to put on it then - the min acceptable profit.
    Maybe we should all double our prices or something so that we make more profit

    xx
    Wise words AliceK...time to put one of those 6 thinking hats on!!! ...one of them must have a 'financial' window!

    maybe not double our fees but cms must surely look at making a living out of running their own business....what it is about otherwise assuming we do it because we really love to care for other people's children?

    Millions of self employed singly run businesses will be in the same shoes once the WTC are cut in April...so cms are not the only ones to suffer....but they need to act not react ...don't you think?
    Nurseries will have employees who lose their TC but they also face a rise in wages hence the reason thay are saying fees will go up.

    I would suggest a policy of 'yearly fee review' embedded in the contract !!

    Some cms rarely raise their fees against a constant rise in prices for all we have to use to run our businesses....apart from petrol there is little we need that does not go up regularly.


    Another thought..the DfE has said they will offer £4.85 for their new funding when it eventually kicks in....should Cms not match that or even better that.

    It is a difficult decision but here we are looking at survival and also we need to look at the amount of help toward childcare the govt is offering 'working parents'''cms too are working parents ...NOT charities!

    I hope you will act on your wise thinking!

    Profit is not a dirty word when running a small business...running at a loss is ...I think...not wise especially when it means subsidising govt policies!!
    Last edited by Simona; 06-01-2016 at 10:25 AM.

  19. #16
    Join Date
    Sep 2012
    Location
    In the middle
    Posts
    1,049
    Registered Childminder since
    Feb 06
    Latest Inspection Grade
    Outstanding
    Post Thanks / Like

    Default

    Simona, I was under the impression that the £4.85 included Pupil Premium at 50/55p, am I wrong? Plus is this the amount after the La's have taken their chunk of cream from the top or has that not been announced yet?

  20. #17
    Join Date
    Feb 2009
    Location
    By the sea
    Posts
    8,928
    Latest Inspection Grade
    Outstanding
    Post Thanks / Like

    Default

    Childminding must be one of the few occupations where the government limits your earning potential by having ratios in place, but at the same time will expect you to make a profit equivalent to minimum wage.

    Once they start to look into it I hope they realise that childminding is different to most businesses. Although it won't affect me, I do have a lot of cm friends who are quite worried about it.

  21. #18
    Simona Guest

    Default

    Quote Originally Posted by moh View Post
    Simona, I was under the impression that the £4.85 included Pupil Premium at 50/55p, am I wrong? Plus is this the amount after the La's have taken their chunk of cream from the top or has that not been announced yet?
    I believe you are correct and that is how I understand it...£4.85 includes EYPP where applicable and it is a very complicated formula worked out by the DfE

    That is the amount announced...not sure if it is before or after the 'creaming off' used by LAs for administration......we will hear more once we have had a consultation which is due out in the near future and we get feedback from the implementers.

    As the money given by the DfE is a subsidy cms can match it or charge what they feel makes the business viable and provides some kind of profit...I would never charge below that new figure

    Mouse is correct we are limited by ratio but not limited in personal decision on what to charge....it is our business and our services we sell to parents.
    Personally I think it is possible to reach the MW if we want to
    At the moment many cms are against any of the new policies...we need to wait and see...I believe cms will be in demand soon to share the 30 hours....all we can do is keep updated and informed.
    Last edited by Simona; 06-01-2016 at 04:52 PM.

  22. #19
    Join Date
    Feb 2009
    Location
    By the sea
    Posts
    8,928
    Latest Inspection Grade
    Outstanding
    Post Thanks / Like

    Default

    Quote Originally Posted by Simona View Post

    Mouse is correct we are limited by ratio but not limited in personal decision on what to charge....it is our business and our services we sell to parents.
    Personally I think it is possible to reach the MW if we want to
    .
    I agree, but only if you can use your full numbers. What about childminders who have 2 EYs children of their own, as I did when I first started cming? I actually had 2 EYs age children and a 5yr old when I started so could only have one EYs mindee (I chose not to take on any school aged children as I had no experience of them then!) If a cm was in a similar situation today they would struggle to make minimum wage from one child.

  23. Likes gef918, loocyloo liked this post
  24. #20
    Simona Guest

    Default

    Quote Originally Posted by Mouse View Post
    I agree, but only if you can use your full numbers. What about childminders who have 2 EYs children of their own, as I did when I first started cming? I actually had 2 EYs age children and a 5yr old when I started so could only have one EYs mindee (I chose not to take on any school aged children as I had no experience of them then!) If a cm was in a similar situation today they would struggle to make minimum wage from one child.
    You are correct again as it does depend on the number of places we can fill
    Having their own children the income is restricted and that is something cms have to consider when starting childminding unless they are happy just making a little money if they do not wish to take older children....or have income from a partner/husband.

    For me the business side is important....I would rather see cms doing a good business training alongside all the pre registration procedures than finding out later it may not work while subsidising childcare and all that goes with it.

    I think cms are resilient and if they rethink their practice it can work in the end.

 

 
Page 1 of 2 12 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Quick Links and Advertisements

Important Information Links
Some Useful Quick Links
Advertisements

 

You can also find us on:
Working tax credits changes Working tax credits changes Working tax credits changes

We use cookies to make this site as useful as possible. They are small text files placed in your browser to track usage of our site but they don’t tell us who you are.
By continuing to use this site you are consenting to cookies being placed on your computer. Find out more here: Cookies in Use

Childminding Help and the Childminding Forum are part of Childcare.co.uk