Allow approved childcare as a start up business expense
Allow approved childcare as a start up business expense
On Friday, I sat in a business group discussing obstacles that stop parents from starting their own business in the early years of bringing up children.
Several came up that are not so easily solved - a lack of support from friends and family, insufficient funding and lack of experience.
But one kept popping up that could easily be solved if the government allowed it to be treated (even if only in the early years of a business ) as a business expense.
If you are a full time parent of an under 2/3 year old then it is your responsibility to look after your child 24/7. That is the job.
This is not something you can choose to do part time and if you want to start a business, working time needs to be carved out.
When your child is 3 or 4 years old you are able to claim 30 hours free approved childcare if your household earns under £100,000 and you’re self-employed and started your business less than 12 months ago.
But what about help for children aged under 3 years old?
There is some assistance given in the form of Tax Free Childcare whereby you can get up to £500 every 3 months (£2,000 a year) for each of your children to help with the costs of childcare.
However, in many areas one day's ad hoc childcare can cost anything up to £80 and so this Tax Free Childcare would give around 2 days of childcare a month. This will not be much to help towards time to build a business.
In the early days of my business my daughter was under 18 months old.
I attended key trade shows to learn about the industry, make contacts and, hopefully, start to sell my products. I was allowed to put the car mileage, hotel accommodation and food I ate while away all through the business as legitimate business costs. And I still am able to put all of these as a legitimate cost of doing business.
However, if I needed childcare cover (as my husband was working full time and not in a job where he could work from home) I had to hope my mother was available.
But what if you don't have a partner or a parent or friends who can help?
My husband may well have been able to drop our daughter at a nursery and collect her – but it was a cost that was hard to justify and as it couldn’t be put onto the business we would have to pay for it privately when we only had one person earning.
Why can you claim for a hotel room and not childcare?
A hotel room is often more expensive than a day of childcare (especially if staying in a large city or exhibition area eg NEC) and yet it is absolutely acceptable to put it onto the business as a valid cost. You need to pay for it as it is needed for the business. You couldn't and wouldn't be expected to drive from Surrey to Birmingham each day to attend a trade show. Just as you can't look after your child and attend a trade show.
A potential argument against is that people could take advantage of this and abuse it.
However, it could be limited to:
- businesses in their first year or two years of trading
- by household earning limits
- a set number of hours/days allowed
- approved childcare providers
This is not the same as when a parent returns to work in a job - as they are being paid which gives them a contribution to the costs (although don’t get me started on that subject).
Here we are talking about a parent who is trying to start a business in order to earn money in the future - a successful business will add to the country's coffers.
The space for thinking/doing time that professional childcare can give a full time parent is something that can help that business grow faster.
To think/plan and attend meetings and industry events. It would allow a business owner to book meetings in to coincide with nursery cover or arrange childcare once an important meeting is booked.
In my own experience, every penny I had was put into buying my products and so I tried to cut costs everywhere and we simply didn’t have enough expendable income to pay for childcare ourselves.
One of my first trade shows generated my first sale to well-known retailer JoJoMamanBebe and enabled me to make contacts with other retailers which I then followed up with having met them face to face.
It also led to my meeting fellow entrepreneurs who generously shared their contacts and from this I gained sales to Mothercare and John Lewis. I also met my UK distributor there who I still work with to this day.
I had a great mother who looked after my 18 month old daughter for 3 days – not everyone is that lucky.
Not everyone has a partner or friends and family who can look after your baby or toddler while you are in the early days of starting a business.
Your partner may be able to help with dropping off to a nursery but it is not always possible for them to have random days off or work from home.
Working on a business is real challenge when you are also responsible for your child 24/7. I have had some interesting conversations when taking business calls whilst also dealing with my baby's dirty nappy or some other parenting job.
Whilst we can all be flexible it's unsustainable to be doing a 24/7 job and start a business without any support.
In reality this would actually cost the government very little, it would also increase demand for professional childcare providers which would again would add extra money into the country’s coffers.
It could also enable parents to start that small business without guilt. The guilt of trying to do it all and feeling like you're failing at both is a common story of parent startups.
It would also show that we, as a nation, value the role of a full time parent. That to not be doing it has a real cost that has to be reimbursed.
If you think that allowing professional childcare as a business expense would be a positive thing then please sign my petition