childminder tax query...

gabyjane

Hi last year i was able to claim my rent back through my books as we rented, we have now moved and are S/O so was wondering if i can still do the % we rent...anyone know?
Thanks

fengirl_2

S/O??? What is this?

gabyjane

fengirl wrote: »

S/O??? What is this?

S/O is shared ownership! sorry..half mortgage and half rent

fengirl_2

Ah, thanks!
yes, you would include a proportion of the rent and a proportion of the mortgage interest in your accounts. I am not sure what HMRC would tolerate as presumably you are not using one room solely for business. I'm sure there must be something on the National Childminding Assn's website.

gabyjane

Hi thanks well before we moved it was 10% so our rent was £100 so i put £10 per month down, it is now £153 so i'm guessing £15.30..? the mortgage interest i dont think are allowed but will double check..thanks again x

fengirl_2

There is no reason why mortgage interest wouldnt be allowable as its the same thing as rent (basically).

Yorkshire-Lady_3

fengirl wrote: »

There is no reason why mortgage interest wouldnt be allowable as its the same thing as rent (basically).

No it isn't. You cannot claim for mortgage payments. I should imagine that you can claim 10% of the rent you pay, but NOT on the portion of mortgage.

TaxGeek

Why could you not claim a deduction for a proportion of the mortgage interest? The capital element would not be allowed, but as fengirl says the interest is effectively rent.

Yorkshire-Lady_3

This was taken from the NCMA members handbook 2007/2008.

'You may be able to claim a proportion of your mortgage interest rates if you use part of your property wholly and exclusively for childminding.

If you claim mortgage interest as an expense, you will need to keep full business accounts, rather than the simplified accounts that most childminders are permitted to keep HMRC. You may also be liable to pay Business rates instead of council tax, and capital gains tax on your property when you sell your house.'

In my opinion, for the sake of a few pounds a month, I wouldn't bother! Doing the full accounts is tiresome and much easier if you can do the shortened version.

fengirl_2

I think NCMA are being over dramatic here.
First of all, I cant see how anyone would put aside a room in their house for childminding - surely the nature of the job is that the cared for child would use the living room as well as maybe a bedroom for a nap and other rooms in the house.The stuff about business rates and CGT is alarmist and not what happens in reality.
The part about having to produce full accounts if one claims mortgage interest relief is news to me and I would be interested in knowing the source of this.

Yorkshire-Lady_3

Maybe you could email the NCMA and ask where they got their information. I'm only stating what childminders are being advised by the NCMA.