Guest Posted February 1, 2007 Posted February 1, 2007 New twist in the tail. Something has been queried at our day care meetings. When you receive the nursery grant from the LEA should it be put down as non taxable income? How are other nursery owners/ managers treating it?
Guest Posted February 1, 2007 Posted February 1, 2007 Hi Sheila I too will be interested in reading the replies. I opened my own pre-school just over 12 months a go and pay all the wages etc myself. I asked my local tax office about this... if i have just received some funding, when i come to self assess again, it may look as if i have made a huge profit when infact the money is needed to cover wages, rent etc and isn't all mine. I was told that i declare it one year and the following year it will right its self (not really sure why i should pay tax on money that isn't really my own, ) i'm still none the wiser and i am not going to worry about it until next year. sorry not any help, but i am sure someone on here will point us in the right direction.... Jo
Guest Posted February 1, 2007 Posted February 1, 2007 Oh my goodness, I never thought of that - I'm a childminder and claim funding for my own daughter so my funding doesn't go on wages..... eek
Guest Posted February 1, 2007 Posted February 1, 2007 Good question, I have put it in my accounts as 'fees' income and it is then calculated over expenditure. As I am running at a loss (£7,000) to date, I don't have any profit to tax. I will ask my accountant what he thinks. Peggy
Guest Posted February 2, 2007 Posted February 2, 2007 My goes down as income the only thing that is taxed is your profit so if you use all your money on wages rent etc and you have no profit then you don't pay tax. there is no differnece between money coming in from parents or grant, if you are running a business. this is the difference between charities and private providers. The tax is only taken from the profit of the business, which would be the owners money so is counted in your self assessment. with the inland revenue you are always a year behind. For example this january my accounts are for sept 05 to aug 06. and I am paying tax on the year befores income. so the tax for 05/06 I will have to pay by january 08!!!!!!! If you can understand all that You have to pay I think a third or a half towards the next years tax as well !!!! will be interesed if any ones accountant comes up with anything different.
Guest Posted February 2, 2007 Posted February 2, 2007 I have asked our early years finance people to look into it as an accountant of one of the other providers says it is non taxable as it is for a service and can be backdated 6 years!!! I have always put it down as income in the past but if you could ask your local finance people what their views are it could have significant implications
Guest HelenW Posted February 2, 2007 Posted February 2, 2007 My accountant advised me that it is taxable. My childcare business is a Ltd. company I dont know if that makes a difference. We only pay tax on the profit we make.
Guest Posted February 2, 2007 Posted February 2, 2007 Hello Helen W, welcome to the forum with your first post, look forward to getting to know you in the future Peggy
Guest HelenW Posted February 3, 2007 Posted February 3, 2007 Thank you for all the welcomes, I look forward to getting to know you all too. Is there a good time to go in the chat rooms? I only joined a couple of nights ago searching for EYPS information on the net I came accross the site, it looks great. Helen
Guest Posted February 5, 2007 Posted February 5, 2007 When we first started our business we had a meeting with an IR adviser. We asked the same question, but I cant remember what the answer was, sorry Our accounts have always shown a loss as we take the profit as income and pay tax on our self assessments. Will be interesting to get a definite answer from someone in the know.
Guest Posted February 10, 2007 Posted February 10, 2007 emailed my accountant who responded that it is taxable income. Peggy
whippersnappers Posted April 10, 2007 Posted April 10, 2007 I have always put NEF down on my tax returns as income for fee's. It is after all payment in luie (sorry if i have spelt that wrong), and most of the time doesn't cover the cost of 12.5 hrs it's supposed to be for, so we are all running at a loss anyway. My accountant hasn't said any different, so i just do as he says. So far we haven't paid any tax, because we have run at a loss.
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