Self payment

[mia]

Hi,

how do people generally pay themselves.
Am about to set up with a freind and we are hoping for enough children between us that we can actually make a living.

But no idea about how we would pay ourselves and how this would work tax wise.
Would it be better if we paid ourselves a wage and then went through paye on a monthly basis to pay tax and NI
or oay ourselves monthly and include the figures in the end of year tax return??

[kelly]

I think you need to call your local tax office and have a meeting with them, I think you will have to work out your income and your monthly expenses then work out how much tax you will have to pay and put that away for your end of year tax return. Pay your NI monthly, see whats left and give yourself a wage. I tried paying tax monthly and they wouldn't let me...

Are you going to work as two childminders in a partnership or employing your friend as an assistant? as this makes a difference, if you have an assistant you need to pay min wage, holidays, sick etc.

In short speak to your tax office.....

[buildingblocks]

I can't help you in the fact that there will be two of you doing it.

One piece of advice I was given by my accountant was that for every payment you are given by a parent to put 10% away in a separate account for your tax bill. when you get your tax bill you will either have enough to cover it or a nice lump sumat the end of the year. Now all I have to do is follow that advice lol.

love Kate

[Pauline]

Hi Mia

If you divide the annual income allowance threshold by 52 , then you will find out how much you can earn each week without paying tax.

If I were you I'd then do my accounts weekly, take off all expenses then what is left is your profit. If your weekly profit is more than the allowance then you would need to set some by for tax, perhaps do it the way Kate suggested?

At the end of the tax year you then total each week and put that down on your tax return.

However, when working together from one of your homes then that minder will have more expenses (heat, light, wear and tear etc) to take off her income. If you get what I mean.

Gets a bit complicated.