Registered Childminders who charge a fee for their services must be registered as self-employed with the HMRC. Being self-employed means you are working for yourself. You must therefore calculate and pay your own tax and national insurance contributions and also complete a self-assessment tax return each year.
Unlike the school year which runs from September to September, the tax year runs from April to April.
Tax is then paid on the net income you make. That is your gross income minus the business expenses you have incurred.
You must therefore keep a log of 3 records:
– Your gross income
– Your business expenses
– Your net income
What is gross income?
This is the money that comes to you or is earned and includes some of the following:
– Fees from parents
– Tax credits
– Cash
– Cheques
– Vouchers etc.
What are business expenses?
These are your business costs or the money you spend on your business. These include:
– Business set up costs and day to day expenses
– A list of business expenses you can claim for are listed under – List of Business Expenses you can claim for
What is your net income?
This is worked as shown below:
Net income = total gross income – total business expenses
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