Money stuff
Tax
Childminders are self employed and responsible for their own tax and national insurance. You are legally obliged to contact the tax office as soon as you start working as a childminder and inform them - you can register online. You will then receive a self employment tax return the following April.
Support for childminders
**You will find support for doing your tax figures - income and expenses - in the free documentation from Childcare.co.uk in the childminder accounts folder.
**HMRC also publish a childminder specific page of guidance here.
National insurance
You must inform the National Insurance office that you are self employed and pay class 2 contributions - unless you are entitled to an exemption. There are thresholds over which you must also pay Class 4 NI. If you want to apply for an exemption, you can find more information online.
Remember!
**The tax year runs from the previous April to the current April, so you cannot give any figures that relate to income/expenditure outside of these dates;
**If you make a loss in your first year, do not panic – lots of childminders do, because of buying toys, resources and other start up costs. Your tax return must show your income from any start up or other grants as well as childminding income;
**You must keep your business records separate from household – some childminders choose to use a separate bank account but this is currently (01.2023) a choice. However, with the proposed introduction of Making Tax Digital (now delayed until after 2026) you might need a business account - more information to follow.
**You will need 3 main figures for your tax return – income (from childminding, any other jobs, taxable benefits, houses you might rent out, bank investments etc)... minus expenses (as below)... equals total taxable figure.
Note: you do not need to keep receipts for purchases under £10.
**You must keep your records for 5 years after the end of the tax year;
**You are advised to keep food receipts for 3 months, to comply with food hygiene regulations - this is not an Ofsted or tax office requirement;
**Your accounting books are not usually of interest to Ofsted - however, they can ask to see them if they relate to, for example, a complaint about a child's attendance. Your Local Authority might also ask to look at your income and children's attendance if you are audited for funding. You should note this on your Data Audit.
**Don't put large amounts of expenses you cannot justify and don't put through things if you don't have proof of purchase for them;
You will find more information, including templates, in my 'Money Matters' e-book on my Knutsford Childminding website.