When you're on Making Tax Digital, you'll need to record the business percentage of any expense that has mixed business and personal use. For example, your household bills cover your whole home, but only part of your home is used for childminding.
tiney helps you manage this in two ways:
Set category defaults so the right percentage is applied automatically every time you log an expense.
Override the percentage on any individual expense if a particular purchase is different from your usual split.
Setting up your defaults
The quickest way to get started is to go through the MTD setup flow in the app. This walks you through a few questions about your home and your hours, and calculates your defaults for you automatically.
Step 1: Tell us about your setting
When you tap Yes, set this up for me from the MTD opt-in screen, you'll be asked three questions:
How many rooms are in your home?
How many of those rooms do you use for childminding?
On average, how many hours per week do you provide care in your setting?
Once you've filled these in, tap Calculate my defaults.
Step 2: Your defaults are ready
tiney will calculate a percentage for each group of expense categories based on your answers. You'll see a confirmation that your defaults are ready, along with a preview of what's been set.
Tap Got it to go to your Expense settings, where you can review everything.
Your Expense settings screen
Go to your Wallet, tap Settings, then select Expense settings to see your defaults at any time.
Your expense categories are grouped by the calculation method used:
Time-based (e.g. Household bills): calculated from your childminding hours as a proportion of total hours in a week
Area-based (e.g. Home supplies): calculated from the proportion of rooms you use for childminding
Mixed (e.g. Council tax, water rates & rent): a combination of time and area
Childminding (e.g. Admin & Finance, Advertising): set to 100% as these are wholly business expenses
The percentages shown are what tiney will apply automatically each time you log an expense in that group. If your circumstances change, tap Recalculate my percentages to go back through the setup questions and update your defaults.
What percentage should I use?
HMRC accepts different approaches. The main methods are:
By time: childminding hours ÷ total hours in the week. For example, 40 hours out of 168 = 24%.
By rooms: childminding rooms ÷ total rooms in your home. For example, 3 out of 6 = 50%.
Mixed: multiply the two together. For example, 50% × 24% = 12%.
The key is to be reasonable and consistent. HMRC won't check every figure, but they may ask for an explanation if they ever review your records.
For more detail on how these methods work, see HMRC: Apportioning home expenses (BIM47815).
Not sure what's right for you? Call the Morton Michel Tax Advice line on 0330 058 9861. It's included in your tiney membership.
What if MTD doesn't apply to me yet?
If you're exempt from MTD
If you selected No, I'm exempt from Making Tax Digital, you'll see a screen confirming that no action is needed right now. tiney will remind you when the threshold applies to you, and your expenses will continue to log as normal in the meantime.
You can still tap Set it up anyway if you'd like to start capturing the right proportions now. It won't affect your current tax return, but it means your records will be ready when MTD does apply to you.
If you're using your own accounting software
If you selected No, I'm using my own accounting software, your expenses will continue to log as normal without a percentage automatically applied.
You can still set up expense percentages at any time from Wallet > Settings > Expense settings if you want your in-app records to reflect the right split, for example if you're using your tiney records as a reference alongside your own software.
A few things worth knowing
Your defaults don't change past expenses. Updating a percentage only affects expenses you log going forward.
You can update your defaults at any time. If your hours or home setup changes, go to Wallet > Settings > Expense percentages and tap Recalculate my percentages.
100% categories don't need splitting. Expenses in the Childminding group are wholly business expenses, so the full amount is always recorded. You don't need to do anything extra for these.