Childcare question - informal arrangement

bylromarha

Our friend is having DD pre and post school on an ad hoc basis. She's asked not to be paid as "it means I'll need to put the income on my tax return". She's happy to do it for free, but I'm not happy letting her do it for free!

I'd like to give her an Amazon gift card of the same value each month, whether she looks after DD for 1 day or 20 days in the month.

We both want to be totally above board with this - is this considered a payment for tax purposes, or can I gift her regularly each month without the tax return being affected?

Thanks

booksurr

since the reason for you "giving" the gift card is in respect of her care of DD then it very obviously is a payment for services performed by the friend and would be part of friends' taxable income given there is a very clear cash value attributed to the "gift"

for the avoidance of doubt, it is not a gift, you are paying her a fee in return for the service she performs

agrinnall

If you're paying her she may well have to be registered and abide by the Childcare register requirements - not sure whether this applies if no payment is made.

https://www.gov.uk/government/publications/childcare-register-requirements-childcare-providers-on-non-domestic-or-domestic-premises

bylromarha

booksurr wrote: »

since the reason for you "giving" the gift card is in respect of her care of DD then it very obviously is a payment for services performed by the friend and would be part of friends' taxable income given there is a very clear cash value attributed to the "gift"

for the avoidance of doubt, it is not a gift, you are paying her a fee in return for the service she performs

But it isn't a fee, it's a "thank you for being lovely" gift. If it was a £10 gift card for 1 day looking after her in month 1, and a £30 gift card for looking after her 3 days in month 2 I could see your point, but it'd be a thank you pressy each month of the same amount.

In the same way I have given flowers, wine, whisky, itunes, amazon + google play gift cards to people to say thank you (depending on the persons likes) I want to thank her.

By this logic, the presents I give people who look after my dog/my kids/help me out when I need it should all be on a tax return?

bylromarha

agrinnall wrote: »

If you're paying her she may well have to be registered and abide by the Childcare register requirements - not sure whether this applies if no payment is made.

https://www.gov.uk/government/publications/childcare-register-requirements-childcare-providers-on-non-domestic-or-domestic-premises

Not applicable as DD is over 8 years old.

TBH, those guidelines make me seethe...they are ridiculous. I and all my friends broke the law many times when our kids were under 8. No sense of community about them at all.

iammumtoone

Is there anything you could do for her in return, to avoid getting involved with gifts and possible tax implications.

Maybe you could do her ironing? ok maybe not that, but you get my point.

Do I remember you are a teacher? does she have a child you could offer an extra lesson at home to occasionally?

bylromarha

iammumtoone wrote: »

Is there anything you could do for her in return, to avoid getting involved with gifts and possible tax implications.

Maybe you could do her ironing? ok maybe not that, but you get my point.

Do I remember you are a teacher? does she have a child you could offer an extra lesson at home to occasionally?

I like the idea, but she really doesn't expect anything. She knows I'd help out schoolwise if she asked - as I would have done prior to her looking after DD. It's that sort of friendship - we help each other out. As far as she's concerned, she's taking and picking her own son up from the classroom next door to DD and as DD is no hassle, she is very happy to have her when we need her to. I just want to say thank you and I'd rather spend money on a gift card where she can buy something she wants than on bunches of flowers and wine.

booksurr

you asked

bylromarha wrote: »

We both want to be totally above board with this - is this considered a payment for tax purposes,

bylromarha wrote: »

But it isn't a fee, it's a "thank you for being lovely" gift. If it was a £10 gift card for 1 day looking after her in month 1, and a £30 gift card for looking after her 3 days in month 2 I could see your point, but it'd be a thank you pressy each month of the same amount.

In the same way I have given flowers, wine, whisky, itunes, amazon + google play gift cards to people to say thank you (depending on the persons likes) I want to thank her.

By this logic, the presents I give people who look after my dog/my kids/help me out when I need it should all be on a tax return?

I understand your point of view and your dislike of the bureaucratic answer, but you did ask... if you don't like the situation so be it

you are making regular payments to someone whom you would not otherwise do so in recognition of their services, that is vastly different to a one off thank you gift

duchy

It really doesn't matter what you do -you are giving goods (even if a voucher) in exchange for a service as far as the taxman is concerned.

Personally I'd just buy her a voucher each month and just say nothing - but technically it is not kosher as far as the taxman is concerned but I'm sure it isn't uncommon.

bylromarha

booksurr wrote: »

you asked

I understand your point of view and your dislike of the bureaucratic answer, but you did ask... if you don't like the situation so be it

you are making regular payments to someone whom you would not otherwise do so in recognition of their services, that is vastly different to a one off thank you gift

So if the gifts are irregular and ad hoc, then that's ok? I feel that a more generous Christmas and birthday gift is in order then.

booksurr

bylromarha wrote: »

So if the gifts are irregular and ad hoc, then that's ok? I feel that a more generous Christmas and birthday gift is in order then.

an irregular payment would rather obviously be more easy to hide, but then why did you state you wish to do this above board if all you are really interested in is advice on how to hide below the board?

HMRC's test is are you paying for a service? The answer is yes in every case, no matter what form or frequency you use to disguise the "reward" you pay ("give") to the child minder


you are now turning this into a debate on grey ethics, not on how to stay "kosher" since, by definition, there is only one kosher way and you clearly do not want to use it, despite your initial protestation