Tax and National Insurance Payments

This article has been brought to you by Slough Borough Council's Early Years Development Worker, Danielle Mercer, for the attention of Slough Childminders.

Please see below information and links to further guidance on annual tax and national insurance payments from gov.uk.  As a self employed small business owner you will pay 20% tax if you earn (after expenses) more than the personal allowance which is £12,500 for 2019-20: https://www.gov.uk/income-tax-rates.

In addition, you will pay 2 types of National Insurance:

Class 2           : if your profits are £6,365 or more a year
                        : is £3.00 a week, payable annually with your tax bill

Class 4           : if your profits are £8,632 or more a year
                        : is 9% of income over the profits threshold, payable annually with your tax bill
                        https://www.gov.uk/self-employed-national-insurance-rates

It is usually best to anticipate a tax bill and save money throughout the year.  If you put away a percentage of all your income in a savings account every month, (20% of your childminding income) you will have money put aside to pay your tax, national insurance, Ofsted registration fee, insurance and ICO invoice when due for payment.