Clarification please Mr A

[Chatterbox Childcare]

I am confused as I have different people telling me different things.

1. Using my rooms and claiming an "actual percentage".

I thought from posts on here that we could claim the hours used for minding and personal but not sleeping hours. i.e. 12 hours working, 6 hours sleeping means that for my lounge I use 66%. Other rooms are significantly less.

However, when I spoke to the HMRC they say that I must include everything in a 24 hour period over 7 days. This brings my percentage to 50%. A big difference.

2. Writing off my car from Capital Depreciation and buying a new one?

I thought that if I was stopping one car and moving on to another I could for Car 1 not count the existing year and take the full balance less its value as a loss/profit?

The 2nd new car I could claim a years WDV on capital depreciation but 2 phone calls got to answers from the HMRC.

Can you clarify that if I started in a new business then the car would be CD pro rata for the months based on when I purchased it and if I was an existing business when I purchased it then I would claim 100% pro rata with business/private for the year

3. Interest on Loans

Do I have to pro rata the amount of interest based on business/personal use on the interest of a loan for the car or can 100% be claimed?

Thank you Mr A as I am going around in circles.

PS Did you get chance to look at my spreadsheet yet?

Thanks in advance.

[MrAnchovy]

Hey, I'm back :D

Conscious I still owe you the other thing Debbie, can have a look at that tomorrow. So for this one:

1. Rubbish - there is no prescriptive way to work out the apportionment. Look at HMRC's own Example 6 (http://www.hmrc.gov.uk/manuals/bimmanual/BIM47825.htm) where the apportionments 4/6 and 8/10 are used based on 4 hours business/2 hours private and 8 hours business/2 hours private.

2. If the car is in its own pool, you can claim a Balancing Allowance (or pay a Balancing Charge) as you describe. Generally speaking a car will only be in its own pool if it has partial private use, or was bought before 6 April 2009 and cost more than £12,000. If neither of these is the case, the sale proceeds are deducted from the value of the 20% or 10% pool. If the result is negative you must pay a Balancing Charge, otherwise you continue to claim that percentage on a reducing balance basis until the pool value falls below £1,000 when you can claim the lot.

Writing Down Allowance is not time-apportioned according to when you buy an asset, but it is reduced for trading periods of less than 12 months so the position for the new car is as you say.

3. The allowable deduction is for interest on a loan used to purchase a business asset so you can only claim for the proportion that the asset is used for a business purpose.

[Chatterbox Childcare]

Thank you - your comments are very much appreciated

Will look at it later and if you can forward the spreadsheet when you have time. They told me it would be based on 168 hours a week.

Thanks again

[MrAnchovy]

They told me it would be based on 168 hours a week.

Ask them where they got that from as it has no basis in law and contradicts the example given in their own guidance.

[Chatterbox Childcare]

Ask them where they got that from as it has no basis in law and contradicts the example given in their own guidance.

I will ask.

I have just printed off the examples so I have back up!

Thanks again

[MrAnchovy]

Great - don't let them distract you with Example 4 which does use 24 hours (for some costs) - Example 6 clearly shows only the hours of actual use being taken into account for apportionment of all costs.

[Chatterbox Childcare]

yet...............

I have spoken to the representative from the HMRC who gave me the paperwork stating that I can claim mortgage interest etc... and she is taking it back up the chain to the person who originally gave out the information. So, hopefully the answer will come from the horses mouth and soon I hope...

why does everything take so long with the HMRC?

When I get the calculation can I do an amendment to the last two years tax return or is it likely to trigger off an audit. It could be as much as £2000 tax coming back.

[MrAnchovy]

You can amend 2010/11 (if you have submitted it already) and 2009/10 easily just by resubmitting online (or sending the amended pages if you submitted by post).

To claim for earlier years you cannot resubmit, you have to write to them explaining the situation including

the tax year(s) it relates to
why you think you've paid too much tax
evidence of the tax that's been paid
your signature
how you would like to receive any repayment due

You have until 5 April 2012 to claim for 2008/9. If you want to claim for earlier years you would not normally be able to, but I think as a childminder you might be in a unique position to do so because of the misleading information HMRC used to publish in their guidance to childminders.

This should not trigger any action on claims already submitted: they are entitled to go through your new calculations with a fine-tooth comb of course, but they do have much bigger fish to fry (oops - very mixed metaphors there!)

[Chatterbox Childcare]

You can amend 2010/11 (if you have submitted it already) and 2009/10 easily just by resubmitting online (or sending the amended pages if you submitted by post).

To claim for earlier years you cannot resubmit, you have to write to them explaining the situation including

the tax year(s) it relates to
why you think you've paid too much tax
evidence of the tax that's been paid
your signature
how you would like to receive any repayment due

You have until 5 April 2012 to claim for 2008/9. If you want to claim for earlier years you would not normally be able to, but I think as a childminder you might be in a unique position to do so because of the misleading information HMRC used to publish in their guidance to childminders.

This should not trigger any action on claims already submitted: they are entitled to go through your new calculations with a fine-tooth comb of course, but they do have much bigger fish to fry (oops - very mixed metaphors there!)

Thank you once again..

[Donkey]

damn I wish I could understand anything in this post!!!!!!!

but my daughter doesn't start school till september so I will worry about it later...

seeing as my mortgage is massive this is something I need to understand at some point...

(my interest on my mortgage is about £400 a month)

:(

[Chatterbox Childcare]

damn I wish I could understand anything in this post!!!!!!!

but my daughter doesn't start school till september so I will worry about it later...

seeing as my mortgage is massive this is something I need to understand at some point...

(my interest on my mortgage is about £400 a month)

:(

When it is all clarified I will put it into a spreadsheet which I hope Mr A will run his eye over and then we can all use it if we wish too

Just need the info from the HMRC first

[keeks]

damn I wish I could understand anything in this post!!!!!!!

:(

This is how I feel reading absolutely anything in the Accounts section! :eek:

It's the same as when someone is trying to explain anything to do with finances. I zone out after 10 seconds, completely against my will, and start thinking of nice things... like sparkly things, pets, beautiful trees, little ladies at the bus stop, awesome music, Ikea furniture, faraway countries... :laughing:

xx

[Donkey]

I can cope with sorting my accounts out... just.... its the mortgage and interest bit that makes it go...

Boom!! bye bye brain!