Childminding is one of the most under-claimed professions when it comes to tax. Because you work from home and your expenses are mixed with personal costs, many childminders either don't claim enough — or aren't sure what they can claim. This guide explains everything: from the HMRC-approved simplified method to Ofsted costs, funded hours, and the wear-and-tear rules that could save you hundreds.
Contents
Self-Employed or Employed?
Most childminders are self-employed. You're almost certainly self-employed if you:
- Set your own fees and hours
- Work from your own home
- Find your own parents/children
- Are registered with Ofsted in your own name
- Control how you run your setting
The exception: if you work as a childminder in someone else's home under their direction (like a nanny), you may be employed. But traditional childminders working from their own home are self-employed.
Registering with HMRC
- Register as self-employed within 3 months of starting
- Register for Self Assessment
- You won't need to register for VAT — childcare is VAT-exempt
💡 Tax-Free Childcare: Parents may pay you through the government's Tax-Free Childcare scheme. The money you receive is still your taxable income — it's the parents who get the benefit (20% top-up from the government). You don't need to do anything different.
Two Ways to Calculate Expenses
Childminders have a unique choice that most trades don't get:
Method 1: HMRC simplified method (two-thirds rule)
HMRC accepts that childminders can claim two-thirds (66.67%) of total household costs as business expenses, including:
- Council tax
- Water rates
- Electricity and gas
- Mortgage interest or rent
- Home insurance
- Home repairs and maintenance
This is generous and simple — no complicated calculations needed. Many childminders use this method because it's easy and HMRC-approved.
Method 2: Actual costs (proportion calculation)
Calculate the exact business-use proportion based on:
- Number of rooms used for childminding vs total rooms
- Hours used for childminding vs total hours in the day
- Days per week you childmind
Which is better? For most childminders working full-time from home, the two-thirds simplified method gives a bigger deduction. But calculate both and use whichever saves more — you're allowed to choose.
Actual Expenses You Can Claim
On top of home costs (above), childminders can claim:
Business running costs
- Public liability insurance (childminding-specific, typically £50–£100/year)
- Childminding association membership (PACEY, SCMA, NCMA)
- Phone (business proportion)
- Business bank account fees
- Accounting software or accountant
- Advertising: childcare.co.uk, local Facebook groups, leaflets
- Stationery: printing, laminating, folders for records
- DBS check fees
- Car seats and pushchairs (business use)
Home Costs: The Big One
Home costs are usually the largest expense for childminders. Using the two-thirds method on a household spending £1,500/month:
£1,500 × 66.67% = £1,000/month = £12,000/year in claimable expenses
That's significant. On a typical childminder income of £25,000, that reduces your taxable profit to £13,000 before any other expenses — and you'd pay very little tax.
⚠️ Capital gains warning: If you claim a room is used exclusively for business, it could affect capital gains tax when you sell your home. The two-thirds method avoids this issue because it acknowledges mixed use.
Food and Snacks
You provide meals and snacks for the children — this is claimable:
- Food specifically bought for minded children
- Cooking ingredients used for children's meals
- Snacks, fruit, milk
How to calculate:
- Keep receipts for all food shopping
- Estimate the proportion used for minded children vs your family
- A common approach: track what the children eat for a sample week, then apply that proportion to annual food costs
- HMRC is reasonable about this — they know you can't separate every banana
Equipment and Toys
Claim in full
- Toys, games, puzzles, books
- Art and craft supplies
- Outdoor play equipment (under ~£500)
- Safety equipment: stair gates, socket covers, fireguards
- Nappies and wipes (if you supply them)
- Cleaning products (extra cleaning due to childminding)
- First aid supplies
- Sleep mats, blankets, bedding for nap time
Capital allowances (larger items)
- Large climbing frames or outdoor structures
- Trampoline (with enclosure)
- Computer/tablet for record-keeping and learning activities
- Camera for recording children's development
💡 Wear and tear: Childminding is hard on your home. Carpets wear out faster, walls need repainting more often, furniture gets damaged. You can claim the extra wear and tear — either as part of the two-thirds home costs method, or as specific repair/replacement costs.
Ofsted and Training Costs
All regulatory and training costs are claimable:
- Ofsted registration fee: Fully claimable
- Paediatric first aid course: Required by Ofsted, fully claimable
- Safeguarding training: Claimable
- Food hygiene certificate: Claimable
- SEN training: Claimable
- Early years qualifications: Claimable if updating existing skills
- PACEY/SCMA courses: Claimable
- Conference attendance: Including travel and accommodation if overnight
Funded Hours: Tax Treatment
If you offer funded hours (15 or 30 hours free childcare for eligible families), the government payment counts as taxable income.
- The hourly rate varies by local authority (typically £4–£6/hour)
- This is lower than your normal rate — but it's still income
- You can charge parents for extras: meals, outings, consumables
- Funded hours income goes on your self-assessment just like parent-paid fees
Should you offer funded hours? It brings in families (marketing), but at lower rates. Many childminders find the admin overhead frustrating. Weigh the guaranteed income against the lower rate and extra paperwork.
Tax-Saving Strategies for Childminders
1. Use the two-thirds method
If you haven't been claiming home costs, or only claiming a small proportion, switch to the HMRC-approved two-thirds method. This alone could save you hundreds.
2. Track food costs properly
Many childminders forget to claim food. Do a sample week, calculate the proportion, and apply it to your annual food bill.
3. Claim all training
Every course, every certificate, every conference. These add up — first aid alone is £80-£150 every three years.
4. Don't forget wear and tear
If you repaint a room, replace carpet, or fix damage from childminding — it's an expense. Keep receipts.
5. Pension contributions
Self-employed childminders often have lower incomes but can still benefit from pension tax relief. Even small contributions get 20% added by the government. See our Self-Employed Pension Guide.
6. Marriage Allowance
If your taxable income is under the personal allowance (£12,570) and your partner is a basic-rate taxpayer, transfer £1,260 of your allowance to them — saving £252/year. Many childminders qualify for this.
7. Trading allowance
If you earn under £1,000 from occasional babysitting (not your main childminding), the trading allowance covers it tax-free.
Making Tax Digital
Most childminders earn below the initial £50,000 MTD threshold (April 2026). But digital record-keeping is still worth adopting — it makes self-assessment much easier and you'll be ready when the threshold drops.
Simple spreadsheets or free accounting apps work fine for childminder-level record-keeping.
See our Best MTD Software for Sole Traders guide.
Track Your Childminding Income & Expenses
Our Freelancer Tax Tracker Spreadsheet handles income, expenses, and tax calculations — built for UK sole traders. Works perfectly for childminders.
Get the Tax Tracker — £9Summary: Childminder Tax Checklist
| Task | When |
|---|---|
| Register as self-employed | Within 3 months of starting |
| Register with Ofsted | Before taking on children |
| Keep income/expense records | Weekly |
| Track food costs (sample week) | Once a year |
| Set aside tax money | Monthly (15-25% of profit) |
| File self-assessment | By 31 January |
| Renew first aid | Every 3 years |
| DBS check renewal | Every 3 years (or Update Service) |