Getting a mortgage - Wife is a Child Minder

[JohnDorian]

After a letter last week informing us that our landlord is selling our house, we've been trying to get the wheels in motion to apply for a mortgage, the deposit is being gifted by parents and I'm currently waiting on a figure for an upcoming pay raise in work, have done the sums and can comfortably afford to pay a mortgage (and can demonstrate repayment capacity of 150% of the level of mortgage we'd be looking for via rent and a, now fully repaid, loan I've had for the past 5 years).

The issue we're facing is that, for the past year my wife has been doing some child-minding for cash in hand. Had we known we'd be in a position to apply for a mortgage this soon, we'd have obviously taken care of this beforehand but now need to figure out how to regularise her tax affairs and be able to provide proof of income.

We're jointly assessed for tax and, as such, I'm claiming all her PAYE credits etc. Will declaring her income to the Revenue affect this? I know that as a childminder, she needs to register with the HSE and, once that's done she has a 15k earnings threshold before PAYE is due? Is there likely to be any penalty for having started earning before registering etc?

How do we go about declaring her income for 2015 to Revenue? If I understand it correctly, we have until October to do this for 2015?

 

[Sandals]

One of the disadvantage of taking cash....and I won't go on re risk your family is taking re being uninsured and an accident was to happen with a child in your care, never mind taking fees off registered childminders and purpose built centres who despite societal thinking they are NOT turning huge profits, the large chains are but not the small independents. Already the rot has set in with montessoris and creches closing down. Parents are also at moment getting fee increases in care to cover cost of ecce, much expected in light of second year announced for Sept 2016. Another point is your landlord property is also uninsured due to your unregistered childminding service.


It's very easy register with revenue and you are well aware of the 15k tax excemption. I'm assuming you claim Home Carer Tax Credit, this is affected depending on her earnings.

As for banks, they require accounts for at least last two years but could be three. A cash in hand childminder fees can appear good but factor in insurances, 500euro prsi and tax if over 15k, equipment, food if supplied, art supplies, toys, curriculum, requirements/house adaptions to achieve registration by your county childcare committe or Tusla etc, training and strict ratios all registered childminders will say it's a tough environment made worse by unfair competition.

Your county childcare committe and Childminding Ireland are great for information on becoming a professional childminder.