Tax on PUP for Childminder

frankbradz

Registered User
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For the last 10 years my wife has been an officially declared childminder, minding children in our home. I’m a PAYE worker. We are jointly assessed and each year I complete a Form 11 on ROS.

My wife’s income is always less than the €15k threshold for childminders, so our tax is normally all sorted via my employer.

Last year due to COVID my wife was only able to earn approx €6k from childminding. She was on the PUP for 19 weeks and got approx €6k. That brought her total income to €12k, which is still under the €15k threshold for childminders.

Over the weekend I started looking at our Form 11 for 2020 and it looks like we have a tax bill of approx €2,500. I’ve tried challenging this on the basis that my wife’s income for 2020 is less than €15k including the PUP. Revenue have replied that the PUP is treated separately to her childminding income and is taxable.

Do I have a case in continuing to challenge this, or are we stuck with the tax bill?

Thanks
 
Have they given her any tax credits?
Thanks for your reply.

So at the moment, I've just filled out (but not submitted) our Form 11 for 2020, as I normally have done for the last 10 years. The only difference for 2020 was that my wife's childminding income was half what it usually is and of course the PUP payment of €6k. When she started childminding in 2011 I was advised that it was most efficient to have all tax credits assigned to my income (given she wouldnever earn over the €15k childminding threshold).

My gross salary including benefits is approx €73k. Are you saying that we should ask for some tax credits to be transferred back to my wife, just for 2020, to offset the tax bill due to PUP?
 
Your wife's Paye credit should cover her PUP income.
Did you tick that she was eligible for a Paye credit? You wouldn't have ticked that in previous years
 
She should be given the Paye credit though now which you wouldn't have had added to yours as she didn't have it before, as above advice make sure you tick that box :)
 
Thanks all. I'll have another look and see what difference ticking that box makes. Appreciate it.
 
I ticked the box and our tax bill has now dropped from €2,500 to €1,200. :) Is there anything else I can do to reduce it further, or is that as good as I'm going to get it?
 
Well that has dropped the bill on her income to nil, so you're into a different question / thread at this point!
 
ok.
Well that has dropped the bill on her income to nil, so you're into a different question / thread at this point!
If I remove the PUP payment of €6k from the Form 11, our tax bill drops to €0.

If I look at the Self Assessment page the amount of income arising for this period fluctuates between €73k and €79k depending on whether I enter the PUP amount earlier in the Form. Also the amount of Income Tax chargeable fluctuates between €22,500 (with the PUP) and €20,000 (with the PUP)

This suggests we are still being taxed on the PUP payment, albeit at half of what the original amount was, once I check the PAYE credit box for my wife.
Just wondering if there is still anyway I can further limit the taximpact of the PUP payment beyond checking the PAYE credit box for my wife?
 
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Now I'm not as well up on tax on higher income as I used to be unfortunately :) being permanently in the 20% bracket in recent times but it looks like the tax being charged on the PUP is the higher rate of tax, I don't know enough about the bands at the moment to check that but it looks like you have used up your full 20% band and any extra income then is being charged at the 40% rate so the PAYE credit didn't get rid of all of it like it would have on 20% rate.
 
Hi,
Are you claiming a Home Carer Tax Credit?

If you are, it means she's being taxed at 40%.
 
Hi,
Are you claiming a Home Carer Tax Credit?

If you are, it means she's being taxed at 40%.
Yes, we claimed Home Carer Tax Credit, as my wife is minding our own children at home at the same time as 2 other children. However, when I remove this from the Personal Tax Credits section, it makes no difference as our tax bill is still €1200
 
Yes, we claimed Home Carer Tax Credit, as my wife is minding our own children at home at the same time as 2 other children. However, when I remove this from the Personal Tax Credits section, it makes no difference as our tax bill is still €1200
That makes sense.

You get either:
1. the Home Carers Credit, and her income is all taxed at 40%, or
2. lose the Credit and you Tax band increase so that her income taxed at 20%.

Tax of 1200 on the PUP looks correct.
 
That makes sense.

You get either:
1. the Home Carers Credit, and her income is all taxed at 40%, or
2. lose the Credit and you Tax band increase so that her income taxed at 20%.

Tax of 1200 on the PUP looks correct.

Ok. Appreciate all the advice. Did I read somewhere that we can request the liability due to PUP income to be spread over 4 years?
 
I got my payslip from my employer for Feb and my monthly take-home pay is down by approx €215. I can see from an amended tax credit certificate I received at the start of Feb that my tax rate bands have increased and tax credits have been reduced due to the PUP payment my wife received in 2020.

So Revenue are planning to take the full €2500 by reducing my take-home pay, even though via completion of the Form 11 we are being billed for €1200. So confused. Any advice on how I should approach this?
 
Is your wife on PUP at the moment? 2020 tax bills will not be dealt with by reducing tax credits until 2022. What they have done at the moment is if a spouse is on PUP currently, the other spouse has a tax deduction to cover it. Where they are self employed, this seems to be a higher amount than you'd expect (in my experience). If you call them or contact them via myenquiries, they may reduce it. They did for a colleague of mine.
 
Is your wife on PUP at the moment? 2020 tax bills will not be dealt with by reducing tax credits until 2022. What they have done at the moment is if a spouse is on PUP currently, the other spouse has a tax deduction to cover it. Where they are self employed, this seems to be a higher amount than you'd expect (in my experience). If you call them or contact them via myenquiries, they may reduce it. They did for a colleague of mine.
Thanks for the response. Yes, she is on the PUP at the moment getting €203 a week. So far she has had 5 payments. With the children going back to school in mid-March I expect she will have another 4, maybe 5 payments. That will be 9-10 payments in total. The PUP amount on the amended tax cert is saying €2111.20, so they are not that far away in their numbers. At least I now I know that when she comes off the PUP in mid-March the tax credits and tax rate bands should revert to the norm. Sets my mind at ease.
 
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