Minus the letting agency fee of 10% ( £85 ) so far i've had 2 cheques one for £300 odd and the next £500 odd ( had to pay for eletric tests and things ). Ive never earned much money, i've only ever been a childminder and my husband was a busdriver untill he had cancer and was medically retired in 1999 he has a very small pension and claims Incapacity Benefit, I had breast cancer in 2003 but have never claimed anything as I'm sure I'm not entitled. My mum passed away in September so ive taken a short break from childminding but i'm hopefully starting up again in September but I'm worried about the tax side of things, if I were to earn £100 a week from childminding and £765 rent...can anyone tell me (in simpleton language as I am so thick )how much tax I should be saving for next April, I would be so gratefull for some advice as I don't understand any of this ....MANY MANY THANKS
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You need to estimeate it for now, as you should be completing a Tax Return form at the end of the year.
So, 765 x 12 = 9180
and 100 x 52 = 5200
Your total income is going to be around 14380.
But you can take off your expenses for the house which can be deducted. The profit from rental income is the taxable amount. What you can deduct are in here http://www.hmrc.gov.uk/manuals/pimmanual/index.htm
So, for example, if you pay out £150 in expenses each month your income from the house would be
765 - 150 = 615;
615 x 12 = 7380.
Your personal allowance will be 6035 by the end of the year, so anything above that will be charged at 20% up to £34,800.
A calculation would be;
7380 + 5200 = 12580
12580 - 6035 = 6545
6545 x 20% = 1309 tax to pay.
This is for a full year, but as you say you may start your work again in September, you would multiply the £100 by the number of weeks worked in the year. I hope this helps you :o)
£765 per MONTH rent? With your childminding that would give you about £1,165 per month, or say £14,000 a year. You get £5,435 tax free, so you'd pay tax at 20% on about £8,600, which is tax of £1,720 in a full year, or £145 a month.. If you've only had the rent since last April with no childminding income before September it's not a full year, so your tax for this year would be more like £1,300.
This is on the basis that your parents' house belongs solely to you. You could reduce the tax a bit by giving your husband half the property (re-register it in your joint names, for which you'll need a solicitor), so that if his small pension is less than £5,435 a year he can use up some of his tax free amount against his half share of the rent, but take care - I don't know what effect, if any, doing this would have on his incapacity benefit.