Tax and expenses
Childminders have their own arrangement with HMRC that almost nobody else gets — a fixed percentage of your household bills, and a wear and tear allowance on top. It is generous, and a lot of childminders under-claim it.
In short
- You get an agreed percentage of household bills, rather than having to work out actual business use.
- 40+ hours a week: 33% of running costs (gas, electricity, metered water) and 10% of fixed costs (council tax, unmetered water, rent or mortgage interest).
- Fewer hours, pro-rata — there is a simple formula below.
- Plus 10% of your childminding income for wear and tear. But then you cannot also claim the cost of replacing those items.
- The percentages are based on hours worked, not how many children you have.
- Making Tax Digital has started. £50,000 from April 2026, £30,000 from April 2027, £20,000 from April 2028.
- Keep receipts for anything £10 or over. Food and drink for the children do not need receipts.
This is general information, not tax advice.
Your circumstances matter and the rules change. Verify anything here against HMRC’s guidance for childminders and the underlying manual at BIM52751 before you file, and use an accountant if anything is complicated. Getting this wrong is your liability, not ours.
Why childminders get special treatment
Most self-employed people working from home have to work out what proportion of each bill is genuinely business use, and justify it. For a childminder that would be close to impossible — the business uses the same kitchen, heating and hot water as the family, all day, every day.
So HMRC reached an agreement with the childminding sector setting fixed percentages based on the hours you work. You do not have to prove them. You just have to have worked the hours.
The bit that surprises people
The percentages depend on hours worked, not the number of children. Minding one child for 45 hours a week gets you the same household percentages as minding six for 45 hours.
The household percentages
Two categories, two different rates.
33%
10%
If you work fewer than 40 hours a week, scale it down:
The formula
- Running costs = (your hours ÷ 40) × 33%, rounded up
- Fixed costs = your hours ÷ 4, rounded up
Worked example, 16 hours a week: running costs = (16 ÷ 40) × 33 = 13.2, rounded up to 14%. Fixed costs = 16 ÷ 4 = 4%.
So on a £1,200 annual electricity bill you would claim £168, and on £1,800 council tax you would claim £72.
Mortgage interest, not mortgage payments
Only the interest element counts, never the capital repayment. Your annual mortgage statement will separate them. Claiming the whole payment is one of the most common childminder errors and it is the kind HMRC notices.
The wear and tear allowance
Separately, you can claim 10% of your childminding income to cover wear and tear on furniture and household items.
So on £18,000 of childminding income, that is £1,800 — with no receipts and no calculation.
The trade-off
If you claim the 10% wear and tear allowance, you cannot also claim the cost of replacing those household items. It is one or the other.
For most childminders the 10% is comfortably better, because it is a percentage of turnover rather than a record of actual spend. But if you have just replaced a sofa, a carpet and a washing machine in one year, it is worth doing the sum both ways.
Note this allowance sits with the non-Making Tax Digital rules — if you are within MTD, check how it applies to you specifically.
Everything else you can claim
Separate from the household percentages and the wear and tear allowance, and claimed at actual cost:
- Food and drink provided to the minded children — not your own family’s
- Toys, books, craft materials and equipment — pro-rate anything your own children also use, and keep a note of how you worked it out
- Safety equipment — stair gates, cupboard locks, fire guards
- Outings and travel fares for childminding trips
- Public liability insurance, and car insurance business cover
- Membership fees to a childminding organisation
- Ofsted registration fee and DBS costs
- Training and CPD
- Stationery, printing and postage
- The actual cost of telephone and internet use for childminding
- Car mileage — you can use HMRC’s flat mileage rates rather than actual running costs, which is usually simpler
- Accountancy fees, and bank charges on a business account
The ones people forget
Your Ofsted fee. Your first aid course. The £30 you spent on laminating pouches. Mileage on the school run. Nappies and wipes for minded children. Subscriptions to online resources. Individually small, collectively several hundred pounds a year.
Records — less than you think
If you are not yet within Making Tax Digital:
- Keep receipts for anything £10 or more, and for small items that add up to £10 or more.
- You do not need receipts for food and drink for the children, or for individual items under £10.
- Keep a record of hours worked — this is what your household percentages depend on, and it is the thing most likely to be queried.
- Keep your income records: who paid what, when, including funded hours payments from the council.
Funded hours are income
Money from the local authority for funded places is business income like any other. Record it. Childminders occasionally treat it as somehow separate from “real” earnings, which is a problem waiting to happen.
Making Tax Digital
This is the change most likely to affect you in the next two years.
6 April 2026
6 April 2027
6 April 2028
Under Making Tax Digital you keep digital records and submit quarterly updates using compatible software, rather than one annual Self Assessment return.
What to do about it now
- Work out your qualifying income and see which phase catches you. Note it is turnover, not profit.
- If April 2027 applies to you, start this year. Moving to digital records in a quiet month is far easier than in the month it becomes compulsory.
- A spreadsheet is not automatically enough — it needs to work with compatible software. Check before you build something elaborate.
- Separate your bank account if you have not. It is not legally required for a sole trader, but it makes everything downstream easier.
Getting it under control
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Record hours weekly, not annually
Your household percentages depend entirely on hours. Reconstructing a year of them in January is miserable and inaccurate. Two minutes each Friday.
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Photograph receipts immediately
Straight to a folder on your phone. Faded till receipts in a carrier bag is how most childminders do it, and it costs them money.
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Put tax money aside as you go
A rough rule is setting aside somewhere around a quarter to a third of profit for tax and National Insurance. A separate savings account you do not touch beats a January panic.
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Do the sums once a quarter
Even if you are not in Making Tax Digital yet. It makes the annual return trivial, and you find out early if your rates are too low.
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Get one hour with an accountant in year one
Ask specifically about the household percentages and wear and tear. It typically pays for itself several times over, and childminder-specific rules are unusual enough that generic advice often misses them.
The point worth taking away
Most childminders under-claim rather than over-claim — usually by missing the household percentages entirely, or applying them to only one bill. Work through your actual bills once, properly, with the percentages above. It is frequently worth several hundred pounds a year, and it is money you are entitled to.