I have just taken on my first Childminder client. I am OK on the usual day to day expenses that are allowable, via HMRC (BIM52751). However, the client has asked about claiming for building work ? Apparently, she has spent a lot of money on building a "play pen" at the back of the house. It is basically a decked area, that has been made "child friendly". Would this expense be allowable (or part of) ?
Lol, that sounds as though she's built a cage for themn in the back garden! Never mind HMRC I think that you need social services.
just joshin, seems to me that it's capital expenditure rather than an expense.
It sounds very much to me like a similar situation to a garden office where no capital allowances would be available on the structure.
In short that means that the expenditure would sit in the accounts as an asset, never touch the P&L and give no tax benefit as there are no capital allowances available for it. (like garden offices).
Interested to read others takes on this.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Haha - I know what you mean Shamus, I was thinking the same myself. Can't wait to see it, and see how the "inmates" like it.
I was thinking that it would be capital expenditure, so thanks for confirmation on that. Hadn't come across the question of garden offices before, so handy to know that there would be no CA due on this expenditure either.
As rule of thumb, with a few exceptions, anything constructed outside of a building that sits on the land, is a structure. Most structures get no Capital Allowance at all.
Unlike fixtures & fittings within a building (Plant and machinery for HMRC purposes), which can have capital allowances claimed.
Thanks again everyone. Good information, and confirmed my own thoughts.
As a follow on from this, the client has asked about costs of building a "wooden playhouse" and "sandpit" in the back garden. I was at first treating these costs in the same way as the "playpen", but, I found an instruction manual from HMRC, provided by www.childmindinghelp.co.uk which gives an example of a childminder purchasing a playpen and trampoline. In the example, it allows the relevant business proportion as an allowable AIA claim. Would the same rule not apply if you built the playpen, etc ?
Its the difference between a temporary and a semi permanent structure. The £90 playpen that they are talking about in the example given I would actually expense rather than put through as capital expenditure.
That is not the same as the structure indicated by the first post which to me seems to be capital expenditure without capital allowances due to its nature.
For the wooden playhouse provided that such is child sized and not attempting to put through something that a adult could use then AIA's would be available against that for this type of business.
For the sandpit cost the structure and the sand seperately. the sand is a short life consumable and would be expensed. The structure could be expensed if less than (say) £100 or capitalised and use AIA.
There is also the small claims pool that could be used but no need for me to confuse matters with that when the AIA does everything that you need it to.
Just to emphasise again though. Confirm what that playhouse is before you determin how it should be treated.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thanks again Shamus ! I was hoping that you would agree with me on the playhouse and sandpit, and I will ensure the safeguards you have pointed out are adhered to (not yet built, so can pass on your comments). I met the client this evening and am happy that everything is "genuine". Interesting case for me as not dealt with childminders before !
