Childminder - living on your business premises

Total cost of household or flat rate still needed

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my client is a self employed childminder. till last September she had been living in the house which she uses for her childminding business. In September she moved out with her husband but she kept the house for her business. She uses every room in the house for the business.

I belive that the whole cost of the house (rent, utilities etc.) now will be her business expenses and she does not need to use the flat rate scheme anymore. She thinks she still has to use it because the business is registered with Ofsted as 'childmindig on domestic premises' and domestic premises refers to her home. 

Has anyone got the same issue before? my client is scared of using the total expenses.

thanks 

Replies (5)

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Euan's picture
By Euan MacLennan
08th Feb 2017 14:41

According to the Ofsted Early years and childcare registration handbook, page 4, ‘Domestic premises’ means premises which are wholly or mainly a private dwelling. If your client is no longer providing childcare in her home, the problem is that she is in breach of her registration and must re-register with Ofsted in order to provide childcare on non-domestic premises.

When she has done that, there should be no problem with following your proposed tax treatment of her trade.

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Replying to Euan MacLennan:
Worm
By TheLambtonWorm
08th Feb 2017 15:06

Taking the words at their literal meaning - Will moving out really mean the building is no longer a "private dwelling" ?

I have no experience in Ofsted matters I'll hasten to add.

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Replying to TheLambtonWorm:
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By Mr_awol
08th Feb 2017 15:45

There may be several issues with the rather odd process of moving out but keeping the house just for childminding - insurance, mortgage, rates, and of course the Ofsted regulations. None of them affect the tax position though, which should be based upon what is actually happening.

That said, I don't think I actually believe that the childminder has actually moved out and is retaining a 'spare' house (with all the associated running costs) just for child minding purposes, or for that matter that 'all' of the rooms are 100% business use. There's more to it somewhere.

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Replying to Euan MacLennan:
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By freshapple
09th Feb 2017 10:47

Thanks for the handbook. I spoke to my client yesterday. She is now checking the options for registering as a non domestic premises. She said she would need approval from the neighbours and she would needs special planning permission from the local council. In the meantime I think she should be living there.

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paddle steamer
By DJKL
09th Feb 2017 10:52

Given it appears to be rented to her as a dwelling if I were her landlord I would not be very happy with what is unfolding, she surely has a use clause and a prohibition re business use.

Whilst minor business use might be acceptable and usually does not cause a problem, I am not sure as a landlord if I would be happy with a tenant using my property for childminding when rented to said tenant as a residence for their own use; wear and tear certainly springs to mind but also buildings insurance issues and probably other issues.

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