Use your gross fees before food, toy, outing and use-of-home costs are deducted.
If you are a registered childminder, you are self-employed for tax purposes — and that means Making Tax Digital applies to you in exactly the same way it applies to any other sole trader. But there is one change specific to childminders that genuinely matters more than the general MTD rules: the future of the wear and tear allowance.
Yes, if your gross childminding income (plus any other self-employment or rental income) exceeds the relevant threshold:
| Tax Year Assessed | Threshold | MTD Start Date |
|---|---|---|
| 2024–25 | Over £50,000 | 6 April 2026 — mandatory now |
| 2025–26 | Over £30,000 | 6 April 2027 |
| 2026–27 | Over £20,000 | 6 April 2028 |
Your gross income is your total fees received before expenses — not your take-home profit. A childminder charging £5 per hour per child, looking after three children full-time, can reach £45,000–£55,000 gross relatively easily once you account for a full school year of bookings.
Under the old system, many childminders claimed a flat 10% wear and tear allowance to account for the additional damage children cause to a home used for business — without needing to itemise every individual cost. This was simple, but it didn't always reflect the real cost, especially for childminders with multiple children or who run a particularly busy setting.
Under MTD's digital, continuous record-keeping model, HMRC is moving towards itemised expense claims rather than flat allowances. This means childminders will generally need to:
The end of the simplified wear and tear allowance does not mean you lose all your deductions. Standard allowable expenses for childminders remain fully claimable under MTD:
| Expense Category | Examples |
|---|---|
| Food and drink | Meals and snacks provided to minded children |
| Toys and equipment | Toys, books, outdoor play equipment, stair gates, high chairs |
| Outings | Entry fees, travel costs for trips with minded children |
| Use of home | Proportion of utility bills, council tax, mortgage interest, or HMRC's simplified flat rate |
| Insurance | Public liability insurance — a legal requirement for registered childminders |
| Training | Ofsted-required training, first aid courses, qualification renewals |
| Replacement and repair costs | Furniture, carpets, decorating — itemised, with receipts, instead of the flat wear and tear rate |
It is worth being clear about a common point of confusion: the wear and tear allowance change is separate from HMRC's simplified expenses flat rate for use of home, which is based on the hours you work from home each month. This use-of-home flat rate remains available under MTD and is unaffected by the wear and tear changes. Many childminders will continue using it alongside itemised claims for wear and tear and equipment costs.
With itemised claims now required instead of the old flat 10% rate, this question matters more than it used to — a missing receipt used to be a non-issue, since the flat rate didn't depend on individual purchases. Now, every item you claim ideally needs evidence behind it.
HMRC's guidance is more practical here than people expect. If a receipt genuinely goes missing, you do not automatically lose the right to claim — HMRC accepts reasonable reconstructed evidence where original proof is unavailable:
If this change feels like it has landed harder on childminders than on other self-employed trades, that's not just a feeling — it reflects a genuine, long-standing arrangement that is now ending. The 10% wear and tear allowance wasn't a generic tax rule; it was part of a specific agreement between HMRC and the childminding sector (known as BIM52751) dating back to 1986, recognising that childcare delivered from a family home causes a particular kind of wear that doesn't apply to most other self-employed work.
Coram PACEY, the leading membership organisation for childminders and home-based childcarers in England and Wales, has been running an active campaign — alongside the Scottish Childminding Association, Northern Ireland Childminding Association, and other childminding bodies — calling on HMRC and the Treasury to reconsider the removal of the allowance under MTD. Their position, backed by a large-scale survey of UK childminders, is that itemised-only claims create a disproportionate administrative burden for small, home-based businesses without dedicated bookkeeping support.
This is genuinely useful context if you are a childminder navigating this change: you are not alone in finding the transition difficult, the sector's concerns have been raised directly with HMRC and government, and the situation remains live — HMRC has said it will keep reviewing the impact during the 2026–27 transition. Worth keeping an eye on Coram PACEY's updates if this affects you directly, particularly if you're in the 2027 or 2028 phase and want to stay informed before your own MTD start date arrives.
If you are above the threshold, your MTD quarterly updates will report your childminding income and expenses in the same standard self-employment categories used by any sole trader — turnover, cost of goods/materials, and other allowable expenses. Your software categorises food, toys, outings, insurance, training, and use-of-home costs under the relevant standard expense headings. There is no special "childminder" category in HMRC's system — your business is treated as a standard self-employment trade.
Your Ofsted registration as a childminder and your MTD tax obligations are entirely separate systems with no overlap. Being Ofsted-registered does not affect your MTD threshold or obligations — what matters for MTD purposes is purely your gross self-employment income. Equally, MTD compliance has no bearing on your Ofsted registration status.
Our free calculator checks your exact threshold, deadlines, and recommends the easiest software for managing receipts and itemised expense claims.
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