As a nursery, you can claim certain expenses back from the HMRC to reduce your tax bill. The rules may change so it is important to keep upto date with any changes or restrictions.
Currently the following items can be claimed:
- startup expenses
- day to day expenses (HMRC call these revenue expenses)
- capital expenses/allowances (large items which are subject to depreciation)
Startup Expenses include the following:
Premises prep
- Fences and gates with padlocks
- Grill covers for drains
- First aid boxes and contents
- Fire safety resources and contents
- Safety equipment – moving locks on doors, stair gates, toddler reins or wrist straps, warning stickers
Registration costs
- Doctors’ fees
- Training course cost
- Ofsted registration fee
Equipment
- Buggies
- Car seats
- Play equipment (indoor /outdoor)
- Toys
- Disability or cultural resources
Business costs
- Early Trackeror EYFS recording system / or paper based recording system
- Complaints book, visitors log book, registers, medical book, injuries log etc. unless part of Electronic system like Early Tracker
- Public Liability Insurance
- Printing costs for business cards / flyers,
- Printer ink for policies and procedures, permission forms unless using electronic version as in Early Tracker System
- Advertising – websites etc.
Day to Day expenses include the following:
Business Expenses
You are allowed to claim on your heating, lighting, water, council tax, rent, etc.
You can also claim for wear and tear.
But remember to keep a copy of all your original bills
This is based on a 40 hour working week.
Boiler or other maintenance agreement
Council tax
Rent
Water rates
Cleaning costs
- Carpet cleaning for rooms where children are minded
- Cleaner for rooms children use
- Oven cleaning
- Furniture cleaning – sofas etc.
Sundries
Cleaning items such as disinfectant, towels, kitchen rolls, washing up liquid, bin liners etc.
Stationary
- Pencils, pen, erasers, envelopes, stamps
- Photographs for parent
- Computer, tablet, Printer, printer ink, paper for childminding paperwork
- Presents, cards, wrapping material etc.
Telephone
Whether you use a mobile or landline, you can claim your line rental or the business calls you make.
Broadband
The cost of internet can also be claimed.
Electricity/gas
If you prepare food then you can claim back your annual bill for food preparation
TV Licence
Only if the TV is solely used for the purpose of of the business
Public Transport
If you use public transport to take children to outings like play centres of shops then you must keep your tickets as proof of travel
Own Transport
If you use your own car for travel, you must decide whether you are going to claim costs or claim mileage. You cannot do both.
If you claim mileage you can charge 45p per business mile for the first 10000 and then 25p thereafter. This includes all the running costs such as fuel, insurance, tax, repairs etc.
If you are using a motorbike, then it is 24p per business.
It is a good idea to keep a book in your car to log your mileage down or log it in your phone.
You can also claim the costs of:
- MOT
- Cleaning
- Valeting
- Car wash
- Service
- Repairs
- AA/RAC breakdown cover for designated business vehicles
Meals /Snacks
HMRC will accept ‘reasonable estimates for food and drink provided for children being minded’
However if you provide meals they can be calculated as follows:
You can calculate this per meal for example:
Packet of Pasta £1.50
500g mince £4.00
1 onion £0.20
Tin of tomatoes £0.50
½ tube of tomato puree £0.50
2 carrots £0.40
Total: £7.10 for 5 children = £1.42 for each child
You do not need food receipts for the Inland Revenue but you will need them for Environmental Health inspectors.
General expenses
Toiletries such as Nappies, wipes etc, toys, craft resources, books, baby cutlery/crockery etc. that you need to pay for during the course of your day can be claimed.
Toys etc. will need a receipt.
Remember large items should be logged as a capital expense and shown on your tax return, not as a general expense.
Equipment – specialist equipment or normal equipment
To comply with disabilities or children’s needs
Safety alterations required by Ofsted
Safety equipment – highlighted by risk assessments
Electronic Toys:
Wii, Nintendo etc. can be claimed if minded children use it or for a percentage that the children use it.
Gardener
Only if they maintain your outside premises that children use.
Professional development
- Training courses, also travel to and from course, also extra 5p per mile if giving colleague a lift
- Books about childcare
- Magazines
Extras
If you take children to play centres, zoo, cinema, theatre, birthday parties, swimming pool etc. and need to pay for admission that is not passed on to parents because you offer an all-inclusive fee, then these costs can be claimed back as business expenses.
But insure you have parents’ permission if you take children out and also public liability insurance.
You can also claim for ice-creams you buy children too. If the costs come to over £10 you need to have a receipt.
Insurance
Household / contents insurance
Other
If you employ others you may also have the following expenses:
Accountancy fees – if you choose to use one.
Staff wages etc.
Capital Expenses and allowances for large purchases
Capital expenses differ from household expenses because large items often last longer and are subject to depreciation. These are also called ‘plant and machinery’
- A car – this has special conditions, read the following for clarity
https://www.gov.uk/capital-allowances/business-cars
- TV
This can only be claimed if the TV is solely for the purpose of thechildren, in other words business items only.
Additional TV services such as Sky channels etc.
- Some fixtures e.g. fitted kitchens, toilet suites
- Alterations to a building
- Fire alarm and CCTV systems
- Lifts, escalators
- Water heating system
- Air-conditioning
- Electrical systems
- Hot and cold water systems (but not toilet and kitchen)
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