Registered Childminder - Paid to look after own children?

Swiss_Toni

Morning

My wife is a registered Childminder, working from home. We also have 2 children (aged 2 & 3) of our own.

My question is;

Can (should) I pay my wife to look after our children?

I guess more accurately, I should be asking whether I can take into account the fact that by looking after our children she is reducing the number of other peoples kids that she can look after at any time.
When completing Tax Credit forms etc, they ask for Childminding costs - should I put £0 or should I pay my wife the commercial rate that she would charge for anyone else.

I hope this isn't such a daft question (!) - We live together, I am a 40% tax payer and she is at the basic rate.

I just wonder if we would be better off if I paid her iro £300/week?

And just to add to the the possibilities - my employer would allow me to take payment in Childcare Vouchers, so I believe that means I would get that £300/week tax free, it would be allowed for when making our declaration for Child Tax Credits as a legitimate childcare cost and being on such a low income, my wife would pay minimal tax on them (and certainly not the 40% I would have paid).


I felt like a dirty MP writing the last paragraph :rolleyes:

Money_Grabber13579

Swiss_Toni wrote: »

I felt like a dirty MP writing the last paragraph :rolleyes:

Don't feel like that! You're only attempting to claim the tax back, they want the whole amount back! And they STILL don't think they've done anything wrong!:mad::mad::mad:

Anyway, back to the question. I'm not sure you would be allowed to pay your wife to mind children, because she'd probably be doing that anyway, whether you paid her or not! Although, you would be allowed to pay another close family member, such as grandparent. (People have done this in the past, because the children have ended up better off than the parents and so have to keep their own parents!)

Oldernotwiser

A good try but you can't do it!

Money_Grabber13579

jimmo wrote: »

Now, now you two.
I find it morally reprehensible that someone could pay his wife for looking after their own children and I rather think that the OP did as well. However, if there is a tax saving to be made then why not?
As it happens the tax laws prevent the OP from claiming but the huge difference is that the OP didn’t make the law. MPs did.

Yep, I agree, it's not a desirable situation, but if tax can be saved, as you say, what's the big fuss?

stardoman

When I registered as a childminder a few years ago, there were several grandparents going through the process at the same time as me. As long as they were registered the parents could claim the childcare part of the tax credits. In practice, the parents did not seem to pay the grandparents - they claimed the money and kept it. I became quite friendly with some of them and they were very open about the fact that they did not want the money, they loved looking after their grandchildren. But they thought it would help their children financially if they could claim the childcare element. Personally, I think this is wrong.

One of the Ofsted inspectors who did one of my inspections, suggested that 2 friends who registered as childminders could officially look after the other person's child and then claim the childcare element of the tax credit system. Personally, I was not comfortable with this. The inspector thought it was a good idea as it meant that each child could be checked for child abuse.

Mandy.

Just wanted to add, this inspector wanted all children in some form of childcare as early as possible. She viewed this as a child protection issue.

dmg24

stardoman wrote: »

When I registered as a childminder a few years ago, there were several grandparents going through the process at the same time as me. As long as they were registered the parents could claim the childcare part of the tax credits. In practice, the parents did not seem to pay the grandparents - they claimed the money and kept it. I became quite friendly with some of them and they were very open about the fact that they did not want the money, they loved looking after their grandchildren. But they thought it would help their children financially if they could claim the childcare element. Personally, I think this is wrong.

One of the Ofsted inspectors who did one of my inspections, suggested that 2 friends who registered as childminders could officially look after the other person's child and then claim the childcare element of the tax credit system. Personally, I was not comfortable with this. The inspector thought it was a good idea as it meant that each child could be checked for child abuse.

Mandy.

Just wanted to add, this inspector wanted all children in some form of childcare as early as possible. She viewed this as a child protection issue.

Parents are only allowed to claim for care provided by grandparents when the grandparents also provide care for at least one non related child.