Preschool fees

[bunyip]

Slightly odd question.

If I pay a mindee's preschool fees, can I put it through my accounts as a legitimate business expense?

I figure people must have done this before: there's even a space for noting it on the pacey contracts.

[chris goodyear]

I would because if you weren't doing this work you probably wouldn't have this expense. Can I ask why you are paying for the parent?

[k1rstie]

Bunyip, have you been hacked? It's not the sort of question I would ever think you would ask!

[Chatterbox Childcare]

Yes you can

[moggy]

...isn't that some kind of tax fiddle? (upping your expenses?)

[bunyip]

Thanks for all your replies. All perfectly good and sensible. I should maybe have explained more.

K1rstie - love your reply. I was simultaneously amused and flattered.

I was unsure cos a previous self-employed client was told by their accountant/tax advisor that they could not put childcare costs through their business expenses. I appreciate the circumstances are different, but didn't want to ring any alarm bells with HMRC if they called in my book-keeping records and saw a load of receipts from the local preschool.

...which is sort of me thinking a little along the same lines as Moggy, or at least I can understand how it could look that way. However, it's not so much upping my expenses as offsetting 'earnings' that I wouldn't actually be earning, IYSWIM.

Cutting a long story short, the child starts school this September and would really benefit from attending a group setting. Mum and Dad can't afford to pay both me and preschool, and I'd not normally charge for hours when a lo is at another setting. Also, parents work some way off, so need me to do the runs to/from preschool, and be available for emergency collection from preschool (eg. snow day, power cut, bump, etc.) They also live in a different town, whilst preschool is in our village: so I'd be handing money to preschool one way or another cos parents wouldn't have day-to-day contact with the leaders. Going there and back is no great deal: I already do so for other children on the days this one will be there.

Preschool's fee for a morning session is a £1or2 less than my hourly fee. The simplest way to make it fair and affordable for the parents seems to be to keep charging them as per our current arrangement, and for me to pay the preschool fee. This way gives me a couple of quid for effectively being on standby for emergencies. (Normally I wouldn't charge for hours attended at another setting, but would not promise to be available for emergencies either.) But, if I can't put it through expenses, I end up paying tax on a sum of money which I'm merely passing on to the preschool.

The other way would be to let the parents pay the preschool bill, for me to reduce my bill to them. That way, I'd only be putting my (now reduced) fee through the accounts without the need for an 'expense' to offset, IYSWIM.

Hope that all makes sense.

[smurfette]

Thanks for all your replies. All perfectly good and sensible. I should maybe have explained more. K1rstie - love your reply. I was simultaneously amused and flattered. I was unsure cos a previous self-employed client was told by their accountant/tax advisor that they could not put childcare costs through their business expenses. I appreciate the circumstances are different, but didn't want to ring any alarm bells with HMRC if they called in my book-keeping records and saw a load of receipts from the local preschool. ...which is sort of me thinking a little along the same lines as Moggy, or at least I can understand how it could look that way. However, it's not so much upping my expenses as offsetting 'earnings' that I wouldn't actually be earning, IYSWIM. Cutting a long story short, the child starts school this September and would really benefit from attending a group setting. Mum and Dad can't afford to pay both me and preschool, and I'd not normally charge for hours when a lo is at another setting. Also, parents work some way off, so need me to do the runs to/from preschool, and be available for emergency collection from preschool (eg. snow day, power cut, bump, etc.) They also live in a different town, whilst preschool is in our village: so I'd be handing money to preschool one way or another cos parents wouldn't have day-to-day contact with the leaders. Going there and back is no great deal: I already do so for other children on the days this one will be there. Preschool's fee for a morning session is a £1or2 less than my hourly fee. The simplest way to make it fair and affordable for the parents seems to be to keep charging them as per our current arrangement, and for me to pay the preschool fee. This way gives me a couple of quid for effectively being on standby for emergencies. (Normally I wouldn't charge for hours attended at another setting, but would not promise to be available for emergencies either.) But, if I can't put it through expenses, I end up paying tax on a sum of money which I'm merely passing on to the preschool. The other way would be to let the parents pay the preschool bill, for me to reduce my bill to them. That way, I'd only be putting my (now reduced) fee through the accounts without the need for an 'expense' to offset, IYSWIM. Hope that all makes sense.

Sounds a bit messy to me! Can't they pay the preschool through direct debit .. Would be worried it would go pear shaped ! They could give you a few quid for the pick up / drop offs / standby?

[bunyip]

Tbh, the only real change is that I pay the preschool bill and put it through as an expense, plus I make a note in the space on the pacey contract that we're doing that.

Really, it's not that different from me buying admission tickets for a trip and then adding it to a family's income, rather than asking mum and dad to buy the tickets separately.

[Mouse]

My cm friend sends some of her mindees to the local playgroup. She tells parents this from the outset. She puts their name down, does all the liaising with playgroup, signs them up & pays the fees. Other than completing any necessary forms the parents actually have very little to do with the playgroup. She charges full fees for the day and pays the playgroup fees herself.
I've asked her and she says she puts it through as an expense.

[k1rstie]

I am following this thread with interest. My small brain cannot really work it out. What happens when free funding comes into play?

[k1rstie]

My brain did work out one problem.


The preschool may require a terms notice and you need a months from your parents. You could be in a situation where you have paid the fees or will still have to pay the fees and the child is no longer in your care.

[bunyip]

I am following this thread with interest. My small brain cannot really work it out. What happens when free funding comes into play?

I'm doing the free funding and that won't change. It's my only bone of contention with the preschool, with whom I have excellent relations. I lose financially from free funding, which is paid below my rate. Preschool wins on free funding as their nominal cash fee is less. Preschool occasionally get upset that I let parents chose to put their funded hours with me, cos it saves them money.

If you're new to the forum,you have to understand I'm completely insane and then it all makes sense.

[bunyip]

My brain did work out one problem.


The preschool may require a terms notice and you need a months from your parents. You could be in a situation where you have paid the fees or will still have to pay the fees and the child is no longer in your care.

That is an excellent point.


But........

I'm also providing care for the preschool leader's grandson, who is also on a month's notice. So if she wants to with this fat, aging CM, either she or her daughter will have to give up work.

And they say "power corrupts".