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Post by pirateship on Sept 12, 2007 9:49:28 GMT
Hi guys,
I just have a quick question about tax. I have decided to put 20% of my earnings away each month to cover my tax and national insurance. Does this amount seem about right? Is it too much/too little?
I don't want to get caught short when the tax man comes, but I don't want to be putting by too much - I'd rather have it to spend!
To angeldelight - I have my first mindees starting on Monday. (you asked in a different thread entitled signed my first contract) Six and seven year old school drop off/pick up and a two year old for a couple of days a week. Can't wait to get started!
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Post by Wiggly on Sept 12, 2007 12:10:45 GMT
Can't help with the tax but best of luck for Monday.
Wiggly x
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Post by mel on Sept 12, 2007 12:20:37 GMT
generally you should be able to absorb lots of your tax in expenses but depending on how much you work, you will probably need some tax money.
Mel x
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Post by sarahnev707 on Sept 12, 2007 13:04:31 GMT
20% sounds sensible - at least if you don't need it, it will be a savings plan!! Sarahx PS I've not paid tax yet and i've been minding 13+ years but I still put some away just in case!
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Post by stacie1985 on Sept 12, 2007 14:12:31 GMT
Hello working out on the mindees i have now and the basic deductions we can take off theres no way will be paying tax this year at least. but we decided as a couple ... see when theres money involved he's there lol dont look after the kids though. no im joking we decided would be a good idea to save 25 percent of what i earn each month and put it in another account. I know unlikely to need but i just see it as better safe than sorry and anyway what a lovely suprise each year when you dont need to pay and you can get that new kitchen or holiday you wanted see what i mean . I decided to save 25 percent coz thats the most i think you would be taxed x
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Post by lorraine2767 on Sept 12, 2007 16:33:19 GMT
Hi Sarah Hope you don't mind me asking but I have been childminding for only 4 years and I have paid tax every year how do you manage to do it. I have just had to pay £400 at the end of July which really wasn't nice.
Any tips would be great.
Lorraine xx
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Post by carolinel on Sept 12, 2007 16:55:11 GMT
sorry I can't offer any help as i only started last november and still haven't got round to doing my self assesment, but I would be very interested to hear any anwers/tips. I was under the impression that it was very rare for childminders to pay any tax so I haven't saved anything.
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Post by janet on Sept 12, 2007 17:05:37 GMT
if your wages are under £5000 you will not have to pay tax, we all know we have loads of out goings and i have never paid in all my years of minding, on saying that i am earning more this year but still hope to not pay xxxx
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Post by lynnslittleuns on Sept 12, 2007 17:51:32 GMT
Can i ask, is the £5000 per year before or after all your expenditure.
This is my first year and work has come in thick and fast. If i carry on as i am then i will have earned over £16000. Will i be taxed on the whole amount. Its very confusing.
Thanks. Lynn xx
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Post by Pauline on Sept 12, 2007 18:51:06 GMT
Can i ask, is the £5000 per year before or after all your expenditure. This is my first year and work has come in thick and fast. If i carry on as i am then i will have earned over £16000. Will i be taxed on the whole amount. Its very confusing. Thanks. Lynn xx The £5,000 is after your have taken off all the expenses. When you say you've 'earned' £16,000 is that the money collected from parents BEFORE expenses have been taken off? If so then you will only be taxed on the amount you end up with after all expenses have been taken off the £16,000 I've been minding 23 years and have never paid tax, you really need to think about everything you spend on childminding and put it down as expenses.
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Post by lou on Sept 12, 2007 18:59:56 GMT
pauline has said it all really, you just need to put as much as poss through your books.
the first yr i was minding, i wasnt clever enough and didnt do my books very regularly or keep reciepts in a safe place so was hit with a £900 bill (due in jan right after xmas nice!!)
Now i make sure i do my books regularly and put as much as i can through, i actually got a refund the yr after the big bill.
just be wise and if you have bought something that you wouldnthave if you wernt minding then put it down!! also remember to put mileage through and percentage of bills etc.
HTH lou xxxxxxxx
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Post by lynnslittleuns on Sept 12, 2007 19:02:44 GMT
Hi again.
Yes the £16000 is the amount collected from parents.
Even after expenses i still feel i will have quite a lot left over. Sounds daft doesnt it, too much money.
Whats this 2 thirds ignored ''thingy'' (hope you know what i'm talking about.
Thanks. Lynn xx
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Post by Pauline on Sept 12, 2007 19:10:01 GMT
Hi again. Yes the £16000 is the amount collected from parents. Even after expenses i still feel i will have quite a lot left over. Sounds daft doesnt it, too much money. Whats this 2 thirds ignored ''thingy'' (hope you know what i'm talking about. Thanks. Lynn xx Yes I know what you mean about the 2/3rs thingy!! When claiming certain benefits they will often disregard 2/3rds of a childminders income as expenses. Also, at one time the tax office were happy if a childminders expenses were in the same region but I'm not sure if they do now, but obviously you will still have to prove how you came to your calculations.
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Post by Pauline on Sept 12, 2007 19:11:54 GMT
Another thing to consider Lynn, if you think you will be likely to pay tax why not go out and buy a load of new toys to bring your earnings below the taxable level, better for you to have new toys than line the tax mans pocket!
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Post by lynnslittleuns on Sept 12, 2007 19:23:02 GMT
New toys (yeah) what a good idea.
I was also considering laminating my playroom floor and a few other DIY bits and bobs. Can i claim anything for this.
Lynn xx
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Post by Pauline on Sept 12, 2007 20:08:05 GMT
New toys (yeah) what a good idea. I was also considering laminating my playroom floor and a few other DIY bits and bobs. Can i claim anything for this. Lynn xx Mmmm not sure on that one Lynn, I'd have thought that a new floor might have come under the expenses you've already taken out for "wear and tear". Bit like you couldn't have a new lounge carpet and put it down as expenses. What does everyone else think?
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Post by sarahnev707 on Sept 12, 2007 20:49:35 GMT
Lyn - I would say if you currently have a solid tile floor (or similar) and have become concerned, on doing a thorough risk assessment / looking through your accident book etc that children might hurt t/ are hurting hemselves on your solid tile floor..... Then replace it and put it through your expenses If however, you fancy a new floor... tough! Sarahx
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Post by carolinel on Sept 12, 2007 21:08:12 GMT
talking of floors - i have a cream carpet in my living room which desperately needs cleaning. since i started childminding it has got much worse.
If i paid to have it cleaned would i be able to put the bill through as an expense or would this be considered covered in the 10% wear and tear.
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Post by charleyfarley on Sept 12, 2007 21:12:43 GMT
Not sure but we've a carpet cleaner and I do put the solution through the books as to me it's cleaning products
Carol xx
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Post by jules on Sept 12, 2007 21:20:22 GMT
I would put the cost of carpet cleaning through.
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Post by jules on Sept 12, 2007 21:21:27 GMT
If you earn over £15,000 gross you have to fill in a long tax return rather than just filling in your gross and net amounts.
Does anyone have to do this tax return and how easy (or hard) is it?
Jules
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Post by tasha on Sept 12, 2007 21:22:27 GMT
I put the cost of carpet cleaning through also. If you don't have a hard floor, but your carpet has become so worn it is now a hazard....... Tasha
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Post by son77 on Sept 13, 2007 8:20:47 GMT
Carpet cleaning, I was told you couldn't claim this because anything to do with the house is covered under the 10% wear & tear.
I 'm glad I saw this thread because I haven't saved anything for the tax man because I was told childminders don't earn enough, maybe now I'll start putting a little away just in case.
Another question, I have a mini (car) & need to change it because I have another baby starting soon & it wont be big enough. Would I be able to claim a proportion of a new bigger car because if it wasn't for my business I wouldn't need to change it?
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Post by pirateship on Sept 13, 2007 8:52:11 GMT
Seems I've started something here! I just assumed that the tax percentage would be similar to an employed person (as opposed to self employed) except for National Insurance which is less. About £2.20 per month?
You would only need one full timer at a cost of £2.75 per hour to earn over £5000 per year - I'm surprised that most of you don't earn more than this - or have I missed something?
Maybe I'm just being a bit dense but I can't see how you don't pay any tax! Don't get me wrong, I don't actually want to be paying any tax but I just assumed that I would be paying a figure very similar to what I am as an employed person - maybe a bit less after expenses. Or do you all spend at least 20% of your earnings each month on expenses? Sorry guys, I'm lost! So much to learn!
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Post by Pauline on Sept 13, 2007 9:39:36 GMT
Pirateship - I think you are getting confused between earnings (gross) and profit (nett).
Your earnings (gross) from a child at £2.75 and hour might make £5,000 gross in a year, but then take off food, heating, etc. etc. and that £5,000 will be down to less than £2,000 nett - that is your profit (nett earnings). Hope that makes sense
son77 - If you have the NCMA book it explains about claiming for cars. It's quite complicated it you want to claim for the whole car as opposed to just claiming mileage.
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Post by Pauline on Sept 13, 2007 9:41:48 GMT
Or do you all spend at least 20% of your earnings each month on expenses? Sorry guys, I'm lost! So much to learn! Sorry missed this bit - sometimes my expenses can be as much as 60%!!
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Post by 2kidsunder5 on Sept 13, 2007 10:02:27 GMT
talking of floors - i have a cream carpet in my living room which desperately needs cleaning. since i started childminding it has got much worse. If i paid to have it cleaned would i be able to put the bill through as an expense or would this be considered covered in the 10% wear and tear. Caroline I was told that you can have your carpet cleaned and put the expense through your books no more than twice a year. It is only classed as wear and tear if you replace it. I have just had mine done - better to have a clean carpet then line the tax mans pockets Diane x
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Post by angeldelight on Sept 13, 2007 10:08:20 GMT
I have only just noticed this growing post
Great news pirateship hope it goes well on Monday let us know good luck
I have a pdf file if anyone wants it about tax
I tried to put it here but it will not work
So just give me your email addy if you want it
Angel xx
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Post by Pauline on Sept 13, 2007 14:23:15 GMT
I wouldn't mind reading it Angel. Also, if you like, I could add it to the downloads section on the website for future reference. I might also make a new section just for questions about tax and national insurance so that these answers don't get lost. (Another job for Saturday while hubby's at the match )
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Post by pirateship on Sept 13, 2007 14:26:14 GMT
Thanks for your replies everyone. I understand a bit more now. Cheers. X
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