HMRC - claiming for your mortgage

[rickysmiths]

Thank you for all the information. I have three reception rooms and four bedrooms all used for childminding. Since having a rather large extention built last summer our Mortgage term has reduced by 10yrs but the amount we pay each month has doubled and is quite frightening!

From what I have read I would be able to put a portion of the extention costs. Like hard wired smoke alarms fitted, good quality vinyl flooring where if it had been solely our home we would have had carpet, easy release child locks on all the 23 windows! and all the big openers open 90 degrees for exit if there was a fire, we would have only had one in each room and child locks upstairs only. We moved the downstair toilet so it would be nearer the playroom, we would have left it where it was if it had only been a family home.

[MrAnchovy]

Please could you explain how this works. Is it part interest you claim.

Yes, see my worked example elsewhere or this page on the HMRC site.

Also I have never claimed for window cleaner? I pay my 14 year old 5 quid a week for helping clean minding room and toys as an incentive to help. Does this mean I can claim that or is it that grey an area that I should not consider it. I do claim a portion of boiler cover 50% although I would not have it if not minding as my cousin is a registered boiler engineer.

I can't give specific advice here I am afraid.

[Minstrel]

I think these threads show why we should get some accounting lessons as part of our ICP course!

[Donkey]

looks far far far too complicated for my little brain!!!

I do my own accounts and do not use an accountant, so i'll just keep plodding on

[MrAnchovy]

our Mortgage term has reduced by 10yrs but the amount we pay each month has doubled and is quite frightening

A change to the term will only affect the capital element of the payments, but only (part of) the interest element is an allowable expense.

As far as I know, most of these costs are not allowable I am afraid. The smoke alarms and their installation are probably OK (assuming they are required for childminding), but I do not know of any allowance, capital or revenue, for flooring, window fittings (except possibly separately fitted locks or limiters which could come under the category of safety equipment - childproof handles don't count unless replacing currently installed handles) or, in general, toilets.

[Playmate]

A change to the term will only affect the capital element of the payments, but only (part of) the interest element is an allowable expense.

As far as I know, most of these costs are not allowable I am afraid. The smoke alarms and their installation are probably OK (assuming they are required for childminding), but I do not know of any allowance, capital or revenue, for flooring, window fittings (except possibly separately fitted locks or limiters which could come under the category of safety equipment - childproof handles don't count unless replacing currently installed handles) or, in general, toilets.

Just had a lengthy conversation with our accountant. She has advised not to touch with a barge pole Our mortgage is over £1000 amonth and as it is an endowment mortage it is all interest, but she has advised that it is just to easy to get caught out on. We certainly don't want to get caught out, so won't be going down that route

[Bear23]

wow,

i am glad i rent!!

how confusing, well for me anyway x

[sarah707]

I just wanted to clarify something with those who might be wondering what to do for the best.

I have a copy of the latest document from HM Revenue and Customs written for childminders.

it is dated Oct 2010 and has been written to cover 2010 - 2011.

I will send it to Pauline later so she can upload it for files.

On page 5 of this document it says...


• Mortgage payments are not deductible.

[sweets]

I just wanted to clarify something with those who might be wondering what to do for the best.

I have a copy of the latest document from HM Revenue and Customs written for childminders.

it is dated Oct 2010 and has been written to cover 2010 - 2011.

I will send it to Pauline later so she can upload it for files.

On page 5 of this document it says...


• Mortgage payments are not deductible.

aawww i was going to move to a 6 bedroom detached house with an acre of land and put the lot through my books!

shame but think i will stick to what i know

[Chatterbox Childcare]

i think debbie mentioned this before, that you can pay and put it on expenses.

Be aware that to do this I had to get a work permit for my 14 year old - check your council rules

[rickysmiths]

Be aware that to do this I had to get a work permit for my 14 year old - check your council rules

We are required to do this in Hertfordshire for under 16yrs and the forms have to be signed by their school as well.

[aly]

Be aware that to do this I had to get a work permit for my 14 year old - check your council rules

yeah sorry debbie, I don't know the ins and outs about it but remember you did it for your son {it stuck in my mind for some reason lol}

[Chimps Childminding]

[QUOTE=Flutterbyes;858764]looks far far far too complicated for my little brain!!!

I do my own accounts and do not use an accountant, so i'll just keep plodding on

[/QUOTE

same here!!! Would be too worried I would end up in trouble!!! Panic enough as it is

[MrAnchovy]

I just wanted to clarify something with those who might be wondering what to do for the best.

I have a copy of the latest document from HM Revenue and Customs written for childminders.

it is dated Oct 2010 and has been written to cover 2010 - 2011.

I will send it to Pauline later so she can upload it for files.

On page 5 of this document it says...


• Mortgage payments are not deductible.

You need to look at the context of that statement. The paragraph above explains the concessionary arrangement, specific to childminders, that says you can deduct 10% of your general household expenses if you work 40+ hours. So they are saying that you can't deduct mortgage payments using this method.

But every self employed person is entitled to deduct (a relevant proportion of) mortgage interest as HMRC state here, here, and here.

[TheBTeam]

Mr Anchovy, I was going with you on this and boy have i read some stuff! The only thing that i have just seen in BIM 45750 is that it appears to be limited to a maximum loan value of £30,000?


Which severely limits any benefit to us and poss makes it a minefield best left?

[Minstrel]

Boy am I glad I rent!

[MrAnchovy]

Mr Anchovy, I was going with you on this and boy have i read some stuff! The only thing that i have just seen in BIM 45750 is that it appears to be limited to a maximum loan value of £30,000?


Which severely limits any benefit to us and poss makes it a minefield best left?

BIM45750 is confusing because it was written when you were able to claim mortgage interest relief on a loan to buy your home. It was relief on the part of the loan not apportioned to business use that was capped at £30,000. Of course this relief has not been available since 1999/2000 anyway.

Sorry for the confusion, I wish I hadn't linked to this notice now as there are plenty of other statements by HMRC that confirm the point - see the three linked in my last post on this thread.

[sarah707]

You need to look at the context of that statement. The paragraph above explains the concessionary arrangement, specific to childminders, that says you can deduct 10% of your general household expenses if you work 40+ hours. So they are saying that you can't deduct mortgage payments using this method.

With respect to you and the professional training you have received, no they are not saying that.

The document from HMRC states, absolutely clearly, on page 5 -

Mortgage payments are not deductible.

When contacted on the phone and asked, the IR also state clearly on a number of occasions that mortgage payments are not deductible.

As a forum we cannot give out wrong or potentially costly advice to our forum members.

We strongly urge all childminders who wish to follow your advice to contact IR first.

[MrAnchovy]

With respect to you and the professional training you have received, no they are not saying that.

The document from HMRC states, absolutely clearly, on page 5 -

Mortgage payments are not deductible.

When contacted on the phone and asked, the IR also state clearly on a number of occasions that mortgage payments are not deductible.

As a forum we cannot give out wrong or potentially costly advice to our forum members.

We strongly urge all childminders who wish to follow your advice to contact IR first.

I need to state that I am not giving advice, I am providing information. Like all professionals (doctor, lawyer etc.), I can only give advice on a one-to-one basis after discussing all the relevant facts with a client.

[angeldelight]

Oops, that last was in answer

If I am giving the impression that the whole thing is a bit woolly and undefined, that's because it is - there is no black and white here, only grey.

I am an accountant - see here for my hello.

Could you tell us a little bit more about yourself.

How long have you been an accountant for example is this your current job?

What other childminding forums did you use before, were the minders there happy with your information or did you end up with a debate there too?

Just out of interest

Angel xx