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The National Minimum Wage (NMW) is the minimum pay per hour most workers in the UK are entitled to by law. The rate varies depending on your age and whether you’re an apprentice.

Most workers who are 25 or older must be paid at least the National Living Wage (NLW), which is the highest rate of the National Minimum Wage.

The National Minimum Wage rates for 2020/21 are as follows:-

Age 25 and over – £8.72

21 – 24 – £8.20

18-20 – £6.45

Under 18 – £4.55

Apprentice* – £4.15

*If under 19 or in first year of apprenticeship (otherwise refer to wage bands).

The 6.2% rise is double the rate of average annual wage growth and also more than twice the current rate of inflation.

Uniform Rules

When working for an employer there are often myths surrounding whether you can or cannot claim tax relief on items you have purchased for work. The same applies when you are self-employed – although the rules here are different.

Employee

If you are an employee in a childcare setting – or any setting – you are entitled to claim money back on your uniform if you meet certain requirements:

• Did you have to pay for your uniform?
• Do you have to wash your uniform?
• Do you have to replace or repair your uniform?
• Do you solely wear your clothes for work? Every day clothes that you happen to wear to work do not count.

If you are answering yes to any of these questions you can make a claim for tax relief. It is important that if you are paying for items yourself you keep all your receipts although you are entitled to make a flat rate expenses claim.

By heading to www.gov.uk you can check how much you are allowed to claim thanks to their handy guide of professions. However if your profession is not listed – which childcare is not – you are still entitled to make a claim.

Any occupation that is not listed is entitled to make a claim for £60, which means if you pay tax at a rate of 20% that year you will receive tax relief of £12.

Self-Employed

If you are self-employed the rules are slightly different, as is often the case! You can still claim for your uniform, again so long as it is not every day items that you happen to wear to work as well. The items you are allowed to claim for are:

• Uniforms, usually have the logo of the childcare business.
• Protective clothing needed for work – such as aprons, latex gloves etc
• Costumes for actors and entertainers – some self-employed childcare providers have costumes for certain events and these can also be claimed for.

With all uniform items – as well as everything you need for your childcare setting – you must keep all your receipts to be able to make your claim. It is worth setting aside a separate folder for your receipts and claimable expenses as well as keeping them altogether electronically. While some self-employed business owners prepare their own accounts or their own spreadsheets, it could be worth having a professional look after your accounts.

By having a professional such as Accountancy Kids look after your accounts – either on a monthly, quarterly or annual basis – you can make sure you are claiming for everything you are allowed to be. Many self-employed providers make the mistake of claiming for items they are not allowed to, or worse, not claiming for everything they are allowed to!

We recommend keeping every receipt for every purchase to do with your business so that when it is time to complete your tax returns you know exactly where you stand. It is far easier to dismiss a receipt than try and find one for something you could have claimed as a genuine business expense.

The Scottish Government reached an agreement with the Greens to get the budget spending plans through for the coming year. Council tax payers across Scotland are set to face higher bills from April 2019. Local authorities will be able to raise council tax by almost 5 per cent, levy new fees on businesses who offer parking to employees and introduce a “tourist tax” on visitors to their area.

Councils across the country will be able to increase people’s bills by 4.79 per cent this year instead of the 3 per cent cap that was originally proposed. This will result in occupants of an average band D property seeing their annual bill rise by almost £58 if their council chooses to raise taxes in line with the new cap.

People who park at work may also face extra costs after the announcement of plans to introduce a Workplace Parking Levy, which charges businesses a fee for every parking space they provide. Similar schemes already in operation in cities in England see businesses charged more than £400 per space. Rather than meeting the cost themselves, they can pass this onto the workers using them.

The 5p charge on plastic bags given out at shops across Scotland will also be doubled to a minimum of 10p “at the earliest opportunity”, with a charge for disposable cups also set to be brought in.

Any private childcare facility that offers parking spaces to staff may have a considerable annual bill to pay the local authority in Scotland. It’s not known if some local authority council run childcare nurseries would levy this parking tax on public staff employees.

Many small business owners now use a pension scheme for eligible employees. We operate the government scheme NEST for our childcare clients with their monthly payroll commitments.

Any small childcare business that started trading between April 2012 and September 2017 will have implementation dates ranging from 1st May 2017 to 1st February 2018. Those starting out in business  from October 2017 onwards must implement auto enrolment immediately.

Please contact us if you wish us to implement your pension provision.

Many small childcare business owners may be worrying  about the imminent introduction of auto enrolment.

The Pension Regulator has started sending out letters to employers who have at least one member of staff and must automatically enrol those who are eligible into a workplace pension scheme. The staging date for business owners with fewer than 30 staff is between the 1st April 2016 and the 1st April 2017.

To manage the employer responsibilities the employees are allocated into categories. All eligible workers, that is employees who earn over £10,000 per annum or £833 per month are automatically enrolled into the pension scheme.  The employee may wish to opt out and inform the employer and  pension provider but the employee must be opted in first.

The other categories which you may be unfamiliar with  are entitled worker and non eligible jobholder and they also have the right to join the pension scheme. These categories  are below the trigger for automatic enrolment but employees may still join the scheme.

The entitled worker may join the pension scheme but the employer is under no obligation to make a contribution. The non eligible job holder has a bigger incentive if they join as the employer must make contributions similar to eligible workers.

The government has introduced  minimum contribution rates. The starting point is 1% employer and 1% employee contribution until 30th September 2017. These rates gradually increase to a maximum employer contribution of 3% and an employee contribution of 5% from 2018 onwards.

Any childcare business who is struggling to understand the law or would like us to mange their delegated pension provision with NEST should contact us urgently. If  you require childcare auto enrolment, nursery auto enrolment, nanny auto enrolment  or childminder auto enrolment then we can set everything up for you.

At an early stage we decided to operate the government scheme NEST with our integrated payroll software. The pension is managed with low fees and the contributions are diversified into a balanced portfolio for the employee.

To set your pension up successfully all employers must plan ahead. Are you ready?

The tax free childcare voucher scheme which was set to be launched in September has been delayed until 2017 following a legal challenge from the companies providing the vouchers. Under the system parents would pay into the online account and the government would top up 20% of the costs.

The government election pledge that it would offer 30 hours of free childcare a week to three and four year olds in England from September 2016 is under scrutiny following questions about funding availabilty. This entitlement will only be implemented once a full funding analysis has passed through parliament causing delays and continued monetary  problems with childcare fees.

In London it is not uncommom for a full time nursery fee to cost £15,000 per annum.

In Scotland all three and four year olds are entitled to 600 hours of free childcare per year.

Statistics show that most families need two people bringing home a wage and that the number of stay-at-home mothers is at its lowest level in more than twenty years.

Many families rely on grandparents and friends for support as well as childminders and nursery childcare. It was thought by many that friends were not allowed to offer each other reciprocal childcare without Ofsted approval and whoever was watching the children would have to register as a childminder. Fortunately, this ambiguity no longer exists.