Working at a loss?

[jadavi]

Hi I have a bit of an odd quandary: I have had an accountant do my books for the third year. This years net profit is minus! This is after paying two assistants most of the year and claiming for everything we're allowed.

Isn't the taxman going to think this is odd? Should I change my figures to at least break even? (I can choose to not claim for some expenses)

I feel I have had a good year with full numbers and 4-6 nursery children included (higher rate)

Any ideas gratefully received please !

[FussyElmo]

Hi I have a bit of an odd quandary: I have had an accountant do my books for the third year. This years net profit is minus! This is after paying two assistants most of the year and claiming for everything we're allowed.

Isn't the taxman going to think this is odd? Should I change my figures to at least break even? (I can choose to not claim for some expenses)

I feel I have had a good year with full numbers and 4-6 nursery children included (higher rate)

Any ideas gratefully received please !

If you are making a loss is it worth having 2 assistants?

[Fitrix]

If your expenses are legitimate and you are living well enough from your earnings I would keep your tax return as it is and congratulate yourself!!

[Tealady]

It's not unusual for a business to make a loss.

The tax man would only find it odd if you make a loss a few years on the trot as they would wonder why you would be Childminding if you weren't making any money.... and that's straight from the horses mouth (Well the tax man that tutored our Account Course run by the LA)

[amyp]

Can I ask what your out goings are and what you pay your assistants? I'm just employing an assistant.

[Simona]

Hi I have a bit of an odd quandary: I have had an accountant do my books for the third year. This years net profit is minus! This is after paying two assistants most of the year and claiming for everything we're allowed.

Isn't the taxman going to think this is odd? Should I change my figures to at least break even? (I can choose to not claim for some expenses)

I feel I have had a good year with full numbers and 4-6 nursery children included (higher rate)

Any ideas gratefully received please !

Sorry for the question but I am confused...were you not aware during the financial year that you were making a loss?
do you not do your accounts every month ?
your spreadsheet every month should tell you every month if you have a surplus or a minus in your finances and your accountant should be able to advice you professionally on this?

It maybe that all you need to do is to tweak your expenses...look at what is absolutely necessary and reduce/avoid the less important.....also revise your fees...when was the last time they went up and are they covering your costs?
remember that many other providers, such as preschools.... have had to do that because with the funding being below the costs all fees went up and a lot became chargeable when it was previously free.


Good luck

[jadavi]

Thanks

I pay assistants minimum wage.
I don't keep running totals Simona, just a list of expenses and income.

We had a good year. I think the accountant has just dug up every possible expense she can.
We had 8-11 children each day with three of us And me alone when it was 4 or less (nevertheless than three)

We work 4days a week,

[Simona]

Thanks

I pay assistants minimum wage.
I don't keep running totals Simona, just a list of expenses and income.

We had a good year. I think the accountant has just dug up every possible expense she can.
We had 8-11 children each day with three of us And me alone when it was 4 or less (nevertheless than three)

We work 4days a week,

That is certainly very intriguing...expenses can only be generated by you and your business ...how can your accountant dig up expenses apart from her pay in return for doing your accounts each year?

[jadavi]

Also I daren't put up my fees

I am - at £4 an hour the most expensive in my area so I daren't put it up, especially with agencies looming and maybe cheaper alternatives for parents.

I expected to be below the taxable level but didn't expect to be minus. I think I need to get it in the plus bracket at least .

I'm going to knock off some expenses to at least break even - ie I charged for our animal care as we have those for the children (Guinea pigs ) and our dog's care. The car expenses can come off as we only use 8 miles a month and we charged for repairs and servicing. A few other things too.

Talking to her today- to find out what ppsa means which she charged as an expense and also depreciation which is different from the 10% wear and tear figure.

[jadavi]

Amy - a long list of outgoings. We replaced couches this year, put in paving slabs in the garden, replaced our gas fire, cut trees down for safety. Main expense was £11.000 for 2 assistants but they were worth every penny and weren't full time.

[jadavi]

She charged for everything we are permitted - things I didn't know about ie depreciation. I assume that is the house? I'm going to ask her today.
But that's why I use her as she's better informed than me about what I can claim for.

[Chatterbox Childcare]

I doubt depreciation is the house if it is the one you are living in.

Depreciation is normally for assets such as buggies, laptops, computers, cars etc...

When you sign your return to be submitted by others you are saying that you agree with the accountant, so ask away all the questions you want.

You are paying her for her expertise so why take off legitimate expenses? This loss can be written off next years profit.

[bunyip]

Ah, well, if you're using an accountant...................

You've either made a loss after paying accountancy fees, or.......

You've made a loss in the UK but will find your accountant has a set up an on-paper company that has made a huge profit somewhere in the Cayman Islands, or...........

You now own a dog with a few £££thousands in her Monaco bank account.

[jadavi]

She only charges £50 and is so worth it for what she saved me.

[Minstrel]

Amy - a long list of outgoings. We replaced couches this year, put in paving slabs in the garden, replaced our gas fire, cut trees down for safety. Main expense was £11.000 for 2 assistants but they were worth every penny and weren't full time.

Are you sure the couches, paving slabs and gas fire are legit expenses?

[lizduncan72]

Are you sure the couches, paving slabs and gas fire are legit expenses?

Wouldn't the couches and fire come under the 10% wear and tear? Interested in the paving slabs though cos I've just bought some to change our garden from all grass to half grass and half paved for bikes etc!!

[jadavi]

The accountant said the full cost could be claimed as they were for the mindees.

[Simona]

Ah, well, if you're using an accountant...................

You've either made a loss after paying accountancy fees, or.......

You've made a loss in the UK but will find your accountant has a set up an on-paper company that has made a huge profit somewhere in the Cayman Islands, or...........

You now own a dog with a few £££thousands in her Monaco bank account.

Sorry Bunyip...I do not understand the link between this discussion and the use of accountants setting up in the Cayman Island...and why the reference to owning a dog??...sense of humour failure or else?

This is a serious thread...maybe you have no confidence in accountants but I feel it is out of place here...as Truss rightly said many cms cannot run their finances correctly ...
I tend to agree with her ..not with the solution she has found mind you ...agencies...but I think we need to take this seriously and try to help cms...although a qualified accountant does do the job very well.


jadavi...I agree with the questions Chatterbox has posted
I think you need to make sure your accountant is sound and knows the rules that govern childminding
Are they qualified to do accounts or just go through your invoices?

No offence.... but their charge is rather low for and what they are claiming a bit dubious....just from what you say because none of us have seen your accounts

There is a vast difference between Wear and Tear, depreciation and what you can claim as 'tax free allowances' which include gas, electricity, water , council tax etc etc

just check for your own peace of mind.

[jadavi]

Thanks Simona

She is a qualified accountant and charges by the hour. Mine didn't take long as it was her third year.

[jadavi]

My third year I mean .