30 hours free tax care

trw585

Hi. Wondering if anyone can help. My wife is on maternity leave but the SMP has run out and she wants to be off for the whole year...so, as I understand it, shwe would no longer be entitled to the 30 hours free as she doesn’t work the minimum of 16 hours per week or £125 per week. However, we have rental income and before tax her share equates to £12000. When the new tax on btl comes in this year half of this is added to her income as received income, so basically even that share works out as more than £125 per week. Can this be counted as income to satisfy the criteria for 30 hours free.

Dazed_and_confused

When the new tax on btl comes in this year

What new tax are you referring to which starts this (tax?) year?

Even if rental income can be counted surely she would fall down on the 16 hours work element?

trw585

Well it states on eligibility criteria that you need to earn at least £120 per week or work 16 hours or more on minimum wage. I would think the ‘or’ would mean that rental income would suffice regardless of having not actually worked 16 hours. Doesn't it equate to self employment as self assessment forms still have to be made and tax paid on income.

trw585

Sorry, also the tax change i was referring to was that this tax year 50% of rental income is added to your paye as income earned and expenses are paid back at 20%. The remaining 50% is treated under the old regime of taking expenses off before tax. The reason i mention is that the 50% of her share of the rents alone (that is added to her normal paye income) would equate to earning about £140 per week even without the other 50% treated under the old regime. I’m sure on that basis we have a case that she is eligible by earning enough per week through rental income for the remainder of her maternity until she returns to work in October?

Dazed_and_confused

There is no or mentioned here

https://www.gov.uk/help-with-childcare-costs/free-childcare-and-education-for-2-to-4-year-olds

Quite unusual for property rental to be self employment. You yourself described it as BTL and most see that as rental income. Which has its own section on a tax return, separate to self employment.

Dazed_and_confused

There is no split between new and old regime.

There is a new regime, which started in the last tax year, and one method for calculating profits and the tax credit which be available for interest.

The proportion of loan interest claimable reduces each year but still just one method.