HMRC tells Cms to repay Tax Credits

[Simona]

HMRC tells childminders to repay thousands in tax credits | Nursery World

[Ripeberry]

So in effect you can't EVER claim working tax credits unless you are 'full' and making loads of dosh? Really bad news

[Simona]

Mmmm...I am not too sure that this is about being full and making lots of money?

I have spoken to a consultant this morning who does cms 'business training'...she sent me the article...the issue is much simpler and can be tackled easily...if cms take the opportunities now open to them

I will look into it further....I am not to happy at the way this has been put out.

As said before Cms are NOT the only ones having their WTC cut...everyone is in the same boat but Cms can do something about it by reviewing their business practice while employees will not have any way of addressing this although they will have a pay rise from April to £7.20

Hope cms can think about this and be pro-active.

[JCrakers]

So if a childminder has 1 mindee through choice and is also claiming WTC, they wont pay out because they aren't using their business to their full potential?

And now they are asking for payments back?

[Simona]

I strongly believe we need to have all the facts before we can try to address this.
It is not a simple issue.

The example given about a cm choosing to have just one child is fair...it would also apply to someone who runs a shop but only opens for 2 days a week? they too would be asked to maximise their potential earnings.

Having read the article and looked at other information I think the message behind what the HMRC are saying is clear.

The article has various statements that are really concerning and need investigating.

The sustainability of CMs is of real importance and I know there will be conferences and training to address that
This is one example...although the fee is very expensive.... shows what is being planned to support cms remain a viable business....this need is stronger now than ever was in the past.

http://www.westminster-briefing.com/...dminders%20MO1

PS: One of the conference speaker will be from 4 Children...no surprise there as they will say agencies are the answer...they are NOT!!

[mama2three]

Ok I know Im going to get shot down in flames but here goes....

If a parent has the ability and potential to earn enough to pay for their own family and lifestyle then it is absolutely right that they shouldnt claim benefits. Benefits are in place for those who NEED them , not for those who CHOOSE them. whether that is for a childminder or for anyone else. If I could earn enough to fund myself by taking on extra work / doing a few more hours / whatever else then I should do that ...not stick to my preferred life because tax credits can make up the difference.

The welfare state was introduced as a safety net for those in need . Ive got close friends who have decided to limit their earnings in order to stay under the limits and claim benefits. Its wrong on so many levels.

Ok , off to hide now..........

[Simona]

Mama2three....I see your points and it is good to discuss this as it is very important for cms.

The Welfare state was created to support us...unfortunately we have a govt intent on dismantling this and no one is going to be able to stop them....unless they are voted out and that is too far away assuming anyone else wins the elections?

So what is the alternative if a cm cannot work more hours? or take on more children?...look at how the business can be reviewed
is the turnover enough?
are expenses too high?

If the HMRC are talking about earning the MLW even though cms are self employed...that is a good start...let's start earning that...it can't be too difficult to do?

[mama2three]

Simona there simply isnt the money to go around! I dont see it as the government trying to dismantle the welfare state ...and believe me Ive no time for this government...but they need to use what money there is for those in genuine need. In my personal experience the majority of cms whose earnings are low have limited their own income...sticking to having a day off in the week , not wanting schoolies....whatever reason. They choose this , its one reason they went self emloyed , fair enough. But dont then claim benefits to make up the difference when you have the potential to earn it for yourself!
Of course there are exceptions. Many of us have fewer places due to having our own small children etc. The letters from tax credits were looking for this kind of information on why earnings were low. If a genuine reason was evident then of course benefits should be in place......but if answering honestly then its obvious to hmrc that many of us could and should be earning more for ourselves.

[JCrakers]

Ok I know Im going to get shot down in flames but here goes....

If a parent has the ability and potential to earn enough to pay for their own family and lifestyle then it is absolutely right that they shouldnt claim benefits. Benefits are in place for those who NEED them , not for those who CHOOSE them. whether that is for a childminder or for anyone else. If I could earn enough to fund myself by taking on extra work / doing a few more hours / whatever else then I should do that ...not stick to my preferred life because tax credits can make up the difference.

The welfare state was introduced as a safety net for those in need . Ive got close friends who have decided to limit their earnings in order to stay under the limits and claim benefits. Its wrong on so many levels.

Ok , off to hide now..........

I agree with this :-) if youre not using youre business to its full potential then you shouldnt be claiming.

[Simona]

Mama2three I don't know how to highlight your response...so bear with me

I have said that for a long time...some cms have on purpose kept their earnings low to top up with WTC
I agree with your reply.

I was not even aware we could claim WTC...I never have ...but have often had less children that I could have.
I still ran a profitable business...would you not agree that some cms need to look at their fees?
some are charging less than £5...why?
some have not raised fees for years...why? I keep saying review fees yearly....nurseries do so.
some cms not be claiming the entire benefits/perks because they do not know how.

There is no money because we have an incompetent Chancellor with a flawed plan
There is plenty of money for bankers and letting off those who do not pay enough tax though!!

I would like to dig deeper into this issue.

[Simona]

And here is the proof that nurseries are raising their fees

Fees to rise as

Cms must do the same!

[mama2three]

I agree in part simona. Some cms could earn more by being more business savvy , and our economics would benefit greatly from a clampdown on amazon , starbucks and the like.... but too many people in this country have low aspirations ...and thats because they dont see why they should work harder or longer when they dont have to.

I am one of those thousands who charge less than £5. I charge a fair rate for my service ..but for my area any more would price me out of the market. I couldn't increase my earnings by increasing my fees. If I needed to earn more I would have to work longer hours or look at other options such as employing an assistant.

[hectors house]

I partly agree with this as I have a child who qualifies for 2 year old funding because her parents choose to have a hippy lifestyle and only work very part time self employed hours - said child is currently in India for 4 months for the Winter! (Obviously I'm not claiming funding for whilst she is away), half the time when she is with me, her mum isn't working she is doing the gardening.

Does this repaying Tax credits, apply to childminders who have 2 children of their own taking up spaces and can therefore only look after one child or only childminders who have 3 spaces but choose to only fill one of them?

[Simona]

I agree in part simona. Some cms could earn more by being more business savvy , and our economics would benefit greatly from a clampdown on amazon , starbucks and the like.... but too many people in this country have low aspirations ...and thats because they dont see why they should work harder or longer when they dont have to.

I am one of those thousands who charge less than £5. I charge a fair rate for my service ..but for my area any more would price me out of the market. I couldn't increase my earnings by increasing my fees. If I needed to earn more I would have to work longer hours or look at other options such as employing an assistant.

Now is my turn to say something then run for cover!

I don't think you will be priced out of the market because soon you will be charging too low for your service...markets are competitive but you must not under sell your service.

I have done a few calculations this morning and a cm can make a profit with even just 3 children...calculator say so!

Business skills can be obtained slowly but easily ...no one needs to run a mega business...wish I could show cms what to tweak and change and be a bit more savvy...it is really very easy.
Would love to get a few hundred cms in one room and throw a few figures at them!

I totally agree about aspirations and now is the time for cms to aspire not to be constantly seen as the Cinderellas of the sector.....cliche I know ....but true!



HH...this why I said we need more details as your question proves we do not have enough at the moment!

[halor]

It's a tricky one, I agree with mammof3 that if you can pay your way you should. I currently don't work weekends and try and keep one day during the week free. That said, we don't qualify for tx credits anyway.

The free for 2 was brought about to help more parents get back into work or train towards work. The parents, such as the hippys mentioned, make a mockery of this.

I remember a few years ago getting into a blazing row about tax credits, at the time I was working 3 jobs and juggling child care. I had no time to myself and my children were missing out on an awful lot of mammy time. I was doing a maths course with some single mums, single because other half didn't want to move in and have money cut, who were getting way beyond me in tax credits. I was so peeved off because tax credits came about, like free for 2, to help more parents get back into work.

I choose less money so I can spend time with my children, I wouldn't expect others to pay for that though. Yes, we struggle for money and we don't have holidays but that's our choice. This is why I chose childminding, but there are others more business minded. I'm not saying that's wrong, just different to me. Until I have to gain employment I am not willing to work Saturdays and that reflects in my earnings.

Before anyone shouts, I haven't read through the info, this is purely my point of view from the comments already made.

[halor]

I agree in part simona. Some cms could earn more by being more business savvy , and our economics would benefit greatly from a clampdown on amazon , starbucks and the like.... but too many people in this country have low aspirations ...and thats because they dont see why they should work harder or longer when they dont have to. I am one of those thousands who charge less than £5. I charge a fair rate for my service ..but for my area any more would price me out of the market. I couldn't increase my earnings by increasing my fees. If I needed to earn more I would have to work longer hours or look at other options such as employing an assistant.

I charge £5.50 but that's due to the area I live, I've raised it once. Any higher then I too would be putting myself out of business as there are other childminders they can go to

[mama2three]

Just to clarify simona , I work hard and earn a very good income. I do review fees annually , and if you ask those who know me Im one of the more business minded chldminders! I have done my market research and already charge more than many locally. Increasing further right now isnt an option unless there is some kind of local agreement of the kind that so upsets Bunyip - where we all increase our charges together. I earn around £3.50 an hour , though I charge daily so its harder to quantify. Where we agree is that cms should look at maximising profit rather than making up the difference with tax credits!

[Mouse]

I know childminders who receive tax credits and won't take on 3 children as it would put them over the 'earnings limit'. When we've been at our group they'll talk about how they've got one space free, but they don't want to take on another child as it would mean they earned too much to get tax credits. Then there are others who don't qualify for tax credits, so have to work all they can to bring in enough money. Surely it's wrong that some people have been able to choose to work fewer hours or with fewer children, but have their earnings topped up by benefits while others have to work full time with maximum children just to receive the same total amount? I've no problem with people choosing to work a shorter week, or with fewer children, but they shouldn't rely on benefits to top up their earnings.


I also know someone who set up her own business buying and selling second hand goods. She said it was a full time job so claimed full time childcare costs for her 2 children. But she didn't ever really do much business and declared a loss or very low profit every year. She received tax credits, council tax benefit, housing benefit...and anything else she could get. She didn't really have any intention of working, but knew how to play the system. I would hope the new rules would crack down on that sort of thing, but not at the expense of families who really need the help. This person's business was never questioned so she was able to claim huge amounts. I don't think it's wrong for self employed people to have to explain their income, but as usual, the government goes about it in a very rushed, heavy handed way. I hope the genuine cases aren't penalised unfairly, but I do worry for them

[singingcactus]

I charge well under the £5 an hour, and I earn a nice profit. I could earn more of a profit but I chose to fritter my money on the kiddos (I live in a boring boring boring place, it saves me from insanity to splurge). Mind you I am married and my husband earns a living wage, so what I consider a profit is different to what a single parent with a family would consider a profit, I guess.

What is the minimum that hmrc is looking at childminders making before they will allow that their business is viable but still so low it allows payment of wtc? Is it higher or lower than the income generated by 3 x 3yo on 30 hours free childcare (when it comes in)?

I believe that the welfare system is there for those in need too, but not sure that hmrc should be demanding moneys back retrospectively, from anyone, if it was claimed in good faith according to the existing rules. Bring in the viable business rule, and make it clear, from this time forward, not this time and back 2 years or however long they are demanding repayments from.

I never knew that childminders could claim wtc, but I can only assume if I had ever been in the position to need it then I would have figured it out. It would suck if I had made a legitimate claim and then some time later I was told I had been dishonest and they wanted it back. Now.

[Simona]

I charge well under the £5 an hour, and I earn a nice profit. I could earn more of a profit but I chose to fritter my money on the kiddos (I live in a boring boring boring place, it saves me from insanity to splurge). Mind you I am married and my husband earns a living wage, so what I consider a profit is different to what a single parent with a family would consider a profit, I guess.

What is the minimum that hmrc is looking at childminders making before they will allow that their business is viable but still so low it allows payment of wtc? Is it higher or lower than the income generated by 3 x 3yo on 30 hours free childcare (when it comes in)?

I believe that the welfare system is there for those in need too, but not sure that hmrc should be demanding moneys back retrospectively, from anyone, if it was claimed in good faith according to the existing rules. Bring in the viable business rule, and make it clear, from this time forward, not this time and back 2 years or however long they are demanding repayments from.

I never knew that childminders could claim wtc, but I can only assume if I had ever been in the position to need it then I would have figured it out. It would suck if I had made a legitimate claim and then some time later I was told I had been dishonest and they wanted it back. Now.

I am so glad you asked that question....can HMRC claim back WTC if they were paid under the existing rule?
That was one of the issues that concerned me

There are other and I hope someone else spots them