Childminder retainer fees during coronavirus closures

Waxy666

et78 said:

@Waxy666 thanks for your reply and yes I'm not referring to nurseries, it's a childminder in a domestic setting who is renting. Childminder hasn't mentioned fixed costs to run the business to cover and agree this would be acceptable. Does the rent count as business cost? Genuine question! Or should it be a % of the rent based on business hours?

Going back to your earlier question - I just found the HMRC page which explains what a childminder can include as a reasonable business expense on their tax return.  This includes a % of heat & light costs, and also a % of water, council tax & rent.  The % depends on the number of hours they work in a week, but for full time it's 33% of heat & light, 10% of the others.  (google: "childminder is rent a business expense" - 1st result on the page)

From my own googling I've also found that
- Ofsted fees (early years) - £35 per year / £3 per month
- PACEY public liab insurance - £30 per year / £2.50 per month
- PACEY membership - £60 per year / £5 per month
= £10.50 per month for the entire setting.  So these costs alone clearly don't justify any material retainer when split between several parents.

You might always want to read / quote some of the "what about the contracts I already have" FAQ from here: (google: "pacey coronavirus FAQ") which explicitly suggests to childminders "If you do decide to propose a retainer to the families using your service, it will help to explain how this retainer will help you to cover the business costs that you will continue to incur even if you are closed e.g. insurance."

As @Undervalued has said though, ultimately the retainer comes down to market dynamics, not maths.  The childminder can try and charge whatever they want as a retainer without any justification at all and we either have to suck it up or find a new childcare in future.  If they go in too high (in theory) all their parents will refuse (unless they are very rich or very desperate) and the childminder will have to back down.  Morally and ethically I've got a big issue with that, but it seems to be the approach several childminders are taking.

[sorry for the google suggestions, forum won't let me post links.]

bigadjaye

I understand that the retainers being asked for by childminders are voluntary. What happens if someone decides not to pay a retainer? Do they really lose their place given the place is not currently available to them? Even if they are under contract? Also, what happens if someone decides to terminate their contract with their childminder because their childminder is not currently providing a service? Should they pay during the notice period (given in the current situation, no childminder service is actually available)?

Stenwold

There's a huge demand for childminders with rolling monthly contracts from parents who are key workers who can't/don't want to keep their child in school. If you don't want to pay a retainer then don't, free up the space for someone who needs it.  

Eye_Brows

Hi All, 
Some great discussion point that I've found some re assurance. 
I was not amused getting the retainer fee latter from my child's nursery, especially as I had payed for March and only attended for 2 weeks with no option to transfer the payment after they decided to close.  
I was wondering does that same retainer policy apply to after school clubs? With most junior schools not likely to re open until September this I feel is a step to far. I'm reluctant to pay any more. 
Thanks. 

Lauraduddy

I am also struggling to accept paying for a service that I cannot actually use at the moment. My childminder wants to charge me half fees to cover costs which she has failed to outline to me. She is a childminder in her own home but does employ two assistants. My son who turned 3 years old in January will now finally qualify for the 30 hours free entitlement from the government but she has also failed to answer if this will still benefit me and if this will further be deducted from the half fees she wants to charge. She got a bit shirty with me and asked if I am still being paid during this difficult time. I wonder if she is or can claim the 80% wage from the government and start receiving it in June; I am yet to ask this question. Thoughts please, thanks.

Waxy666

I made clear in discussions with my childminder that I was willing to fund fixed costs still being incurred (insurance etc) and would even have agreed to cover a share of rent / mortgage (as these are business costs on tax returns so not funded by the Gov self employed scheme which pays out on profits).  When it became clear that only about 25% of the retainer (<10% of the full fees) could be justified by fixed costs, I asked if the balance would be treated as refundable / deductible from future invoices - I thought that was a fair offer as it supports them with cash in the short term until the government funds are available but comes back to me over time once they are benefiting from the government support - basically giving them an interest free loan.  The response was the contract being terminated.

I think supporting your childminder / nursery to cover fixed costs is absolutely the right thing to do.  We value their care of our kids and want to make sure the spaces are still there when we get out the other side of this thing.  But when they start trying to generate income out of the situation I think that's immoral and unethical.  I know several sets of parents who are paying the retainers out of fear of losing the space - but what they are saying about the childminder behind closed doors is far less than complimentary and it's going to have a long term impact on the relationship.

@Lauraduddy I think they get shirty when you push them because they know they can't actually justify the retainer, so they try and brush you off / force you into an uninformed decision rather than discuss it.  If it was justifiable why wouldn't they just send across something that explained how they'd worked out 50% was the necessary amount or a list of costs they are still incurring so you can at least get a sense of what the money is being spent on.

On the employee point - if your childminder employs assistants they must be either paid via a PAYE system - in which case the Job Retention / furlough support should be available.  OR they are paid as self employed workers themselves - in which case they may qualify for the self employment support same as the childminder.  Either way I don't think this should be factored into the ongoing fixed costs covered by the retainer.