Grandparents and childminding advice?

building

Grandparents and childminding advice? the tax office says that grandparents could become registered childminders too. However the grand parents worry that they will end up paying too much tax - they have a small pension. the tax office has mentioned to speak to a financial adviser. can anyone help. is setting up as a limited company any help. there are grand parents in Uk and in France and we are regularly between the 2.

Savvy_Sue

I'd have thought it wouldn't be too hard to work out roughly how much you will pay the grandparents and for how many hours, add that to their pension, and then see if they are due to pay any tax on the result. If you've really no idea, you could find out when they would be due to start paying tax, deduct their pension from that, and see how many hours childminding you would get for the difference.

And the IR should be able to tell you at what stage either or both grandparent would have to pay tax. I know age is a factor, but if they're young grandparents it probably isn't, IYSWIM.

I don't think childminders have to charge a set rate, so you could fiddle the figures.

Also there would be some allowable taxable expenses, like toys they bought.

National Childminding Assocation would be a useful place to look as well: be aware that registration is more onerous than it used to be. Have to have first aid qualification and encouraged if not required to do training.

TBH I don't think setting up a company would help. But I may be wrong!

Note that this applies to UK situation, I know nothing about France!

nedden

They don't need to set up a private limited company, they will just be self-employed, their are special tax benefits for registered childminders

for e.g

when you calculate the (gross) amount that you pay them they can then minus expenditure to give (net) total.

this includes any toys they buy any food they buy, nappies babywipes, books.
depending on the amount of hours they work a week they can deduct a % of electric and gas and rent from gross income.

This means you can claim back the amount you pay them for your tax credits claim, and they can submit net total to inland revenue for tax calculation,

If they contact their local council and ask the switchboard for the Childrens Information service, they will tell them when the next "recruitment" meeting is for childminders and they will have to complete a course (its short and informative with sensible advice on procedures)

They can ask someone from their local Childrens Info Service to come out to their house to help them look around and check the house meets criteria. (everything will prob be ok with this! when people come and check your house they are nice sensible "normal" people, so nothing to worry about)

They can then join the National Childminiding Assoc, who again are full of sensible advice and will supply them with the paperwork they need to fill out for Inland Revenue re- self employment.

Ofsted will want to visit as well, again not a problem, as long as they have relevant paperwork etc they will find Ofsted is full of support and sensible advice.

irs101

nedden wrote:

This means you can claim back the amount you pay them for your tax credits claim, and they can submit net total to inland revenue for tax calculation,

I'm afraid you won't be able to claim childcare costs if you are using grandparents.

This guide says:

Childcare will not be eligible for help within the Working Tax Credit childcare element if it is provided by a relative of a child caring for that child in the child’s home even if the relative is registered or approved

irs

Savvy_Sue

irs101 wrote:

I'm afraid you won't be able to claim childcare costs if you are using grandparents.

This guide says:

Quote:
Childcare will not be eligible for help within the Working Tax Credit childcare element if it is provided by a relative of a child caring for that child in the child’s home even if the relative is registered or approved

But if the grandparents were caring for the child in the grandparents' home, AND they were registered / approved, then they would be able to claim?

Fran

irs

You can claim .. this is a quote from the website link you gave:-

"What if I am a relative of the making the claim?

If you are a ‘relative’ of the child or children that you look after, you do not have to register as a childminder unless you also
intend looking after other children. Relative means a parent, grandparent, aunt or uncle, brother or sister (whether by blood,
half-blood, marriage or affinity), and includes step-parents.

As long as you are registered or approved, parents can claim for the childcare costs. For example, if you are a registered
childminder or an approved childcarer who looks after a number of children and some are related to you, the parents can still
claim the childcare element.

Parents cannot claim for childcare costs if you give the childcare in the child’s own home and you are a relative of that child."


So it seems you can claim if you are a relative as long as you are registered or approved, but not if the caring is done in the child's home

irs101

This guide is really badly written! I didn't get as far as that next bit.

But having done a bit of searching round it seems that the answer is something different again - see here

It seems that now grandparents only qualify if they are looking after other children as well. I don't know where they get their information from, but LITRG really know their stuff on tax credits and have regular consultations with HMRC, sometimes specifically on childcare rules. So I would be very surprised if they'd got it wrong.

irs

Fran

So the important bits from your link re grandparents is:-

"However, what the Paymaster General failed to mention in her reply to Mr Dhanda is that from 6 April 2005 grandparents will not be able to register as qualifying childminders, when providing care for their grandchildren outside the child's home, unless they also provide care for children to whom they are not related.

If you are a grandparent who has already taken the trouble to register as a childminder under the old rules (and you only look after your own grandchildren) then you will only be allowed to remain as a qualifying provider up to and including 31 December 2005."

Savvy_Sue

That seems a bit mean, moving the goal posts like that for grandparents who've gone to the trouble of registering as childminders. Any other childminder can decide they only want to look after children from one family, but grandparents aren't allowed to! Age discrimination, that's what it is!

Now, here's a few thoughts. Do the grandparents actually have to be looking after other children, or do they just have to say to whoever keeps the lists that they are willing to do so? And do they have to look after other children 48 weeks of the year (allowing for some child-free holidays!), or could they do some 'relief' childminding for other families while regular childminder is away, say one week in a year? Can you see where I'm going with this?

It just seems to me that it would be unfair to penalise parents if the childminder (grandparents) was registered and willing to take other children, but no other family wanted to use their services - perhaps because the childminder only wanted children of a certain age, or was only willing to mind for a few hours a week. It's not the parents' fault if the childminder hasn't been able to find other children ...

Plus there are quite rightly limits to the no. of children who can be minded at once: many of us are daft enough to get it all over quickly so have three pre-schoolers, I believe that used to be the limit (not that either set of grandparents would have been willing to care for all 3 of mine at once!)

I don't know if the NCMA would be able to advise on this - link in post no. 2. Or indeed those knowledgable people irs has referred us to.