Completing your accounts can be a daunting task, but with the tools and information provided within Childminder Accounts we hope to ease the burden and make the job a much more enjoyable experience.
Below is a table detailing the percentage of household expenses you can use dependant on the hours you work per week, please use the yearly costs when working these out.
|Hours Worked||Heating and Lighting||Water rates, council tax and rent|
10% of your total gross income can also be deducted as a ‘wear and tear’ expense.
You will find all the information you need regarding Tax and National insurance under our Tax page, however, Pacey offer a free online training course for members regarding tax and National Insurance to help build your confidence and guide you through the process.
To find out more click here: PACEY www.pacey.org.uk
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Early Years Foundation Stage Development Matters
Ofsted Poster for Parents Childcare
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The tax year runs from the 6th of April to the 5
th of April each year.
The deadlines for submitting your tax return are:
- 31st October after the end of the tax year for paper returns
- 31st January after the end of the tax year for online returns
If you are late submitting your figures (even if there is no tax due) you will be fined!
All childminders are legally required to keep accounting records for Self-Assessment purposes and the figures within your records must match the ones that are entered onto your tax return. Tax fraud can lead to a fine and in some circumstances imprisonment.
You are required to show the following:
- Your Gross Income – Details of any income from parents/grants
- Your Expenses – Money spent on your business
- Your Net Income – The total of your gross income minus the total of your expenses
The Inland Revenue can request to review your accounts and so it is your responsibility to keep your financial records for a minimum of 6 years. We recommend that you print your accounts on a monthly basis and keep them safe in a folder, as well as keeping the paper copy of any uploaded receipts. You will need to keep all receipts for any purchases over £10.
Your ‘Personal Allowance’ or ‘Tax Threshold’ is the amount of money you are legally allowed to earn before you are liable to pay tax. Please click the Tax Information button further information.
The amount of tax payable is calculated at 20% of the net income remaining after your personal allowance/tax threshold has been deducted.
So, for example, if your total net income is £15,500 less your personal allowance figure of £11,500 (2017-2018) = £4,000, therefore 20% tax payable on this amount is £800.
The Tax Information button will also provide you with information on the amount payable for Class 2 and Class 4 National Insurance. Your National Insurance contributions count towards payments such as the State Pension and Maternity Allowance.
Your Tax payable and Class 4 National Insurance contributions will be calculated when you submit your tax return and will be due for payment by the Self-Assessment submission deadline. It is good practice to put some money aside each month to help cover these costs. You can also make a monthly standing order payment into your HMRC account prior to the monies being due.
Furthermore, the inland revenue requires ‘Payments on Account’ if your last Self-Assessment tax bill was over £1000. These monies are in advance and are due in 2 payments, the first on 31st January and the second on the 31st July (you could therefore have to pay your current tax and National Insurance bill as well as 50% of your future bill on 31st January).
You can find further Tax Advice for Childminders via the HMRC website, just click the button below!