BIM52751 - Care providers: childminders: expenses
Profits from childminding are usually chargeable to Income Tax as trade profits, although some occasional childminders’ profits may be chargeable as miscellaneous income.
In 1986 the then Inland Revenue entered into an agreement with the National Childminding Association (NCMA) on record-keeping practices and the expenses that would be allowed as deductions from childminding income. This guidance is based on that agreement, but was updated in March 2026 to cater for changes including Making Tax Digital for Income Tax.
This guidance provides alternative approaches to the standard rules, for keeping records and calculating certain types of expenditure for childminders. Childminders should carefully consider which method is most appropriate for their circumstances when choosing a method to use. Using the standard rules and actual costs may provide a more accurate deduction compared to the alternative methods set out below.
Working outside the home
When this guidance was first introduced, childminders were generally understood to work from their own homes. However, it has become more common for childminders to work from places other than their homes, and changes made by the Department for Education (DfE) in 2024 allow childminders in England to register as a childminder without domestic premises. Before these DfE changes childminders could only provide up to 50% of their provision from non-domestic premises.
Where a childminder works wholly or partly from non-domestic premises, the arrangements for household expenses and wear and tear of household furnishings detailed below apply only to the part of their income and expenditure related to provision from their own home.
Making Tax Digital for Income Tax (MTD)
From April 2026 this guidance does not apply to childminders within MTD. Childminders within MTD should follow the rules for expenses and record-keeping that apply to all other businesses, and not use the alternative methods detailed below. The normal principles outlined at BIM42050 and BIM70000 should be followed in the same way as any other business. This ensures that childminders are able to deduct all their allowable business expenses, including a proportion of those expenses where only part of the expense is incurred wholly and exclusively for the purposes of the business.
Childminders not within MTD may calculate their expenses and keep records following this guidance. Their statutory rights are not affected. Childminders may calculate their profits on the normal basis if they wish to do so. The simplified expenses rules offer a further alternative method of calculating certain expenses (see BIM75000 onwards).
Wear and tear of furniture and household items
A deduction of 10% of total childminding income may be made to cover the wear and tear of furniture and household items. This is intended to include furniture and household items which may be partly used for non-business purposes. A childminder claiming this deduction may not claim relief for the cost of replacing such furniture and household items. Reasonable costs of cleaning furniture and household items, where the need for cleaning is as a result of childminding activities, may be allowed separately.
This is an alternative to deducting the actual costs of purchasing, repairing and replacing these items using the normal principles outlined at BIM42050 and BIM70000, or by deducting capital allowances if appropriate.
Childminders within MTD should use the normal principles set out in BIM42050 and BIM70000, rather than using the fixed 10% deduction to calculate their allowable wear and tear expenses. Using the normal principles for deducting costs in this way may provide more accurate relief for wear and tear, reflecting the actual costs incurred by childminders.
Only childminding income from the provision of childcare from the childminder’s own home should be considered when computing the 10% deduction. The amount of this income should be determined by any just, reasonable and consistent method of apportionment. Occasional visits and trips out when childminding should be included provided care is still fundamentally provided from the childminder’s own home.
Household expenditure
The agreement is based on the hours that childminders work and not on the number of children they care for. A childminder looking after a child on a full time basis for 40 or more hours each week is entitled to claim the full time proportion of expenses. The full time figures should be scaled down depending on hours worked. Hours worked while not looking after a child are not included.
How this works is illustrated in the following table:
Hours worked | % of running costs | % of fixed costs |
|---|---|---|
10 | 9% | 3% |
15 | 13% | 4% |
20 | 17% | 5% |
25 | 21% | 7% |
30 | 25% | 8% |
35 | 29% | 9% |
40 (full time) | 33% | 10% |
For more information on running costs and fixed costs, see BIM47820
This is an alternative to HMRC’s standard approach to apportioning expenditure relating to the use of the home for a business (see BIM47815).
Childminders within MTD should use the standard approach to apportionment, using a reasonable method of apportioning their personal and business costs.
Only costs relating to, and hours worked from, the childminder’s own home should be considered when determining the amount and the proportion of the household expenses to claim as a deduction. Occasional visits and trips out when childminding should be included provided care is still fundamentally provided from the childminder’s own home. Costs relating to non-domestic premises, such as venue hire, can be deducted as normal.
Food and drink
Cost incurred on food and drink for children being cared for is usually a business expense. Reasonable estimates for the costs of food and drink provided for the children being cared for are acceptable and receipts are not required.
This is an alternative to the statutory requirements regarding keeping records (see SALF211) and HMRC’s approach to provisional figures (see SALF206). Childminders within MTD should follow the digital record-keeping requirements of MTD and not use the alternative method set out above.
Records and receipts
The cash book and attendance register produced by Coram PACEY (the successor body to the NCMA) provides an acceptable way of recording income and outgoings. Receipts are not required for items costing less than £10. Receipts are required if a number of smaller items are purchased at one time and the total cost is £10 or more.
This is an alternative to the statutory requirements regarding keeping records (see SALF211). Childminders within MTD should follow the digital record-keeping requirements of MTD and not use the alternative method set out above.
Other income and expenditure following general rules
The original agreement also covered the following income and expenditure. These rules are the same as they are for any other business:
- Car expenses – Where appropriate, childminders can use the simplified expenses mileage rates, see BIM75005. However, if the childminder wishes, the actual cost of car expenses for childminding purposes can be claimed instead.
- Other costs - For any other business expenses, the normal principles outlined at BIM42050 and BIM70000 should be followed. Examples of business expenditure include: the cost of toys, outings, books, safety equipment, stationery, travel fares, membership fees or subscriptions to childminding organisations, public liability insurance premiums and the actual cost of telephone use for childminding purposes. This list is not exhaustive.
- Grants - Grants received by childminders to help them to start up their businesses or to meet capital or running costs should be dealt with following normal principles, see BIM40450 onwards. If a grant is received before the business begins to trade, it is not a trade receipt. A start up grant may reduce the amount of pre-trading expenditure on which relief is available, see BIM46355.