Childminder Accountant

Frequently Asked Questions

I am a newly registered childminder and I have just started working how do I register myself as being Self Employed?
As soon as you start your first job you will need to register with HM Revenue and Customs to pay tax and class 2 national insurance contributions.
You will need to call the HMRC Newly Self Employed Helpline within 3 months of starting work otherwise you will get a fine.
Their number is 08459 154 515.

I have just started childminding when is my tax return due?
Tax returns are normally sent out in April each year. They must be returned to HMRC by the 31st January in the following year together with any liability for tax and National Insurance.

What records do I need to keep?
A record of fees and any other money you receive from parents such as outings and food needs to be kept.
Receipts need to be kept for items purchased for use in the business. Along with certain household bills.

Can’t Pay Your Tax Liability?

I have filed my tax return before 31Jan 08 but due to cashflow problems I do not think I will be able to pay the tax I owe by the deadline of 31st January. Will I still receive a late filing penalty of £100?

You will not receive the £100 penalty as you have filed your tax return before the 31 January deadline. Penalties are only charged if you haven’t filed your return. However, as you haven’t paid your tax liability for the 2006/07 tax year by this date, HM Revenue & Customs will begin to charge you interest on a daily basis starting from 00.00am on 1st February on the tax unpaid. Currently interest will be charged by HM Revenue & Customs on late payment of tax at a rate of 7.5% with effect from 6 January 2008 .

You must also try to ensure that you pay the tax you owe by 28 February 2008, as any amounts relating to the 2006/07 tax liability that are still unpaid at this date will receive an initial 5% surcharge. Also, an additional surcharge of 5% will be levied on any tax outstanding if you still have not cleared your 2006/07 tax liability more than 6 months following the filing date, which is the 31 July 2008.

If you are due to make payments on account towards next years 2007/08 tax liability, you will not receive a surcharge or penalty if you don’t make payment of these, but you will be charged interest from the due date of payment, which is 31st January 2008 and 31st July 2008 respectively.

How much will you pay on account?

Each payment on account will be one half of the income tax bill for the previous year after deducting tax paid at source, eg PAYE.

If we calculate your tax for you, we will also tell you if you have to make payments on account and how much.

You will not need to make payments on account:

if your income tax bill for the previous year was less than £500

more than 80 per cent of your income tax for the previous year was paid by deduction at source, eg under PAYE

for Capital Gains Tax.

In some circumstances, you can ask to reduce your payments on account.