Becoming a childminder, and am baffled by doing my own tax and nat insurance?

Question

i am thinking about becoming a childminder, but the thought of working out my own tax and nat insurance is leaving me baffled, i've never been brillient at numbers. is there anyone that is a childmnder and can help me out by telling me what percentage i need to work with and how to work it all out?

Answer 1

You could buy programmes to do this, i think 'Sage' is quite popular. Google it and you might find a free trial...

Answer 2

You should just keep very good records in excel (or similar) of all your income and related expenses.

You are taxed same as employed - first £5,435 (increasing to £6,035 in sept) is tax free, above that is taxed at 20%. If you earn over about £41k (i;d imagine unlikely) then you need to think about paying higher rate tax.

You will pay class 2 and 4 NI. Class 2 is about £2.20 a week fixed. Class 4 is 8% of earnings above £5,435.

The HMRC website is fairly helpful re completing your return (by 31 Jan for the previous tax year) and how to make payments on account during the year.

Have a look at:

http://www.hmrc.gov.uk/sa/index.htm

Good luck!

Answer 3

when you get registered the ncma and your local childrens information service will give you all the info you need. It is really not that hard ( i can do it!!!)

As a general rule

wear and tear =10%

gas/elec= 30%

water and council tax=10%

and you only need reciepts for items over 9.99

If you do your self assesment on line it works your class4 NI out for you.

Dont buy anysoftware though as you dont need it.

Answer 4

Registered/qualified childminders have a special agreement with the Revenue about how much of the household expenses they can claim against tax. This the published agreement ....

http://www.hmrc.gov.uk/manuals/bimmanual...

Also the NCMA should be able to help you and give you guidance on this.

One tip ... the NCMA might try to get you to buy their record keeping book. That isn't necessary.

As indicated above you can keep your records in whatever form you like. On computer (Excel spreadsheets for example) or just on paper. There's no need to go to the expense of buying a complicated computer program like Sage.

Keep it simple. At least to start with. Likelihood is that you are not going to earn a great deal anyway.

Good luck and do post back if you have any other tax related questions.