claiming bills with co-childminder

[Porridge]

I may not have thought this through properly so bear with me...!

I have just started working with a co-childminder, both of us full time, from my house.

With regards to claiming for household expenses; water, gas, electric etc, as I am full time I am already claiming the maximum allowance on my own behalf. How should I now work this with my co-minder? The bills are mine, I pay them, so presumably I am entitled to claim the full percentage on my own behalf? Or do I somehow need to split this with her? Her expenses will obviously be a lot less than mine...

I only ask because if my co-minder worked from her address she would presumably claim the full amount on her property bills too. She doesn't claim anything there as she only works from my house...

Should I ask her for a contribution towards the bills? Have I got that right that she isn't entitled to claim a proportion of my bills as her expenses? What if part of the bill was paid by her? Can she then write off the percentage allowed of what she has contributed?

I'm going round in circles with this! xx

[Boris]

I used to work with a co-minder at her house. I used to pay her £100 a month to work at her house (I guess to help towards bills etc). She claimed the full allowance for expenses and I couldn't claim anything. I guess that you would be having the heating and lights etc on anyway and as you can claim the allowance that would cover it but she should contribute towards other things like food.

I think it all depends on the agreement you want to have with her, what you do feel is fair? Please think about it carefully as, in my experience, it's things like this that cause the problems!!! For example if you said you didn't want her to contribute towards bills and she kept leaving your lights on how would you feel? I know it sounds petty but it does happen!

[MrAnchovy]

I'll come back to bills in a minute, because wear and tear allowance is likely to be a bigger issue. She can only claim the 10% if she incurs some cost. She can't just pay this over to you as 'rent' because you would then have to declare that as income and pay tax on it, so you need to have a contractual arrangement that she will contribute towards replacement of your carpets and furniture. It doesn't matter if the amount she actually contributes is more or less than 10% in any particular year.

Now the bills. Any money she pays you is going to be treated as income for you, so she can claim 100% of this as an expense but you have to pay tax on 100% of it.

[MrAnchovy]

I used to work with a co-minder at her house. I used to pay her £100 a month to work at her house (I guess to help towards bills etc). She claimed the full allowance for expenses and I couldn't claim anything. I guess that you would be having the heating and lights etc on anyway and as you can claim the allowance that would cover it but she should contribute towards other things like food.

I think it all depends on the agreement you want to have with her, what you do feel is fair? Please think about it carefully as, in my experience, it's things like this that cause the problems!!! For example if you said you didn't want her to contribute towards bills and she kept leaving your lights on how would you feel? I know it sounds petty but it does happen!

You should have claimed the £100 a month - if this was recently it might be worth resubmitting tax returns as with 20% tax and 8% NI that is £28 a month!

[Porridge]

Thanks for your replies.

so in order for her to claim the 10% of her income as wear and tear, she would obviously need to conribute to the costs of wear and tear as a result of the business.
So if we agreed that she would contribute 10% of her income (that she would then claim) as a contribution to wear and tear? but then i would effectively increase my income by her 10%, so would pay more tax. So how about if she spends 10% of her income directly on 'wear and tear' of my home, so for example today the stairgate got broken (!) and needs to be replaced urgently. If she were to pay for the new one, and other items that need to be replaced or fixed as a result of the childminding business, she could then claim that 10% (I know she would be no better off, but it would be a help to me)?

Then I guess I was also thinking along the lines of, having 2 childminders here would not necessarily affect the heating or lighting bill (although it's likely we will use additional rooms), but it would definately affect the water bill (the water bill is affected by each child in the house). Is there any way I can somehow transfer what she would have been entitled to claim, to benefit both of us? Also, only I would claim a percantage of my council tax, so her allowance is unused. Can she somehow contribute part of her allowance to me?

I hope you understand, i'm finding this really difficult, but i cant help wondering if there is any potential financial/tax benefit to us working together.

[MrAnchovy]

Thanks for your replies.

so in order for her to claim the 10% of her income as wear and tear, she would obviously need to conribute to the costs of wear and tear as a result of the business.
So if we agreed that she would contribute 10% of her income (that she would then claim) as a contribution to wear and tear? but then i would effectively increase my income by her 10%, so would pay more tax.

Yes that's right.


So how about if she spends 10% of her income directly on 'wear and tear' of my home, so for example today the stairgate got broken (!) and needs to be replaced urgently. If she were to pay for the new one, and other items that need to be replaced or fixed as a result of the childminding business, she could then claim that 10% (I know she would be no better off, but it would be a help to me)?

Right again, you've got it!




Then I guess I was also thinking along the lines of, having 2 childminders here would not necessarily affect the heating or lighting bill (although it's likely we will use additional rooms), but it would definately affect the water bill (the water bill is affected by each child in the house). Is there any way I can somehow transfer what she would have been entitled to claim, to benefit both of us? Also, only I would claim a percantage of my council tax, so her allowance is unused. Can she somehow contribute part of her allowance to me?

No it doesn't work like that I'm afraid. But if you are not looking after your children at the same time you should look into claiming expenses based on the percentage of time you use various parts of the house for minding: you can often claim a much higher percentage that way. You need an accountant to do this unless you want to digest the dozens of pages starting here (http://www.hmrc.gov.uk/manuals/bimmanual/BIM47800.htm).



i cant help wondering if there is any potential financial/tax benefit to us working together.

It rarely makes sense to do something just so that you can pay less tax, what you should do is work out what you want to do and then check how to do it in the most tax efficient way :D