Childminder Tax Returns: What You Can and Cannot Claim as a Business Expense

Tax returns aren't exactly the reason most of us got into childminding. But if you're registered and self-employed, they're part of the job, and getting them wrong can cost you money, either by overpaying or (worse) underpaying and landing yourself with a penalty.

The good news is that childminders can claim a genuinely wide range of business expenses. The frustrating part is that very little of HMRC's guidance is written specifically for us, so a lot of childminders end up either missing legitimate claims or claiming things they shouldn't. I've spoken to enough colleagues over the years who've been doing both.

This isn't a substitute for speaking to an accountant if your situation is complicated, but it should give you a solid working understanding of what's in and what's out.

The basics: how childminder expenses work

As a self-employed childminder, you complete a Self Assessment tax return each year. You report your income (everything parents pay you) and deduct your allowable business expenses. You only pay tax and National Insurance on the profit, so the more legitimate expenses you can claim, the lower your tax bill.

The key word is "allowable." HMRC's rule is that an expense must be "wholly and exclusively" for business purposes. That gets complicated for childminders because so much of what we use is shared between home life and work life. Your kitchen, your garden, your car, even your phone. HMRC recognises this and has specific guidance for childminders, which is worth reading on the Gov.uk website alongside the PACEY and HMRC childminder helpsheets.

You have two main approaches for claiming home-based costs: the simplified expenses flat rate method, or the actual costs method where you calculate a genuine proportion. More on that below.

What you can claim

Let's start with the straightforward ones.

Food and drink you provide to minded children is fully claimable. Keep receipts, or at minimum a log of what you spend. I find it easiest to do a rough weekly shop breakdown rather than agonising over individual items. If you buy a pack of crackers that you and the kids share, claim your best estimate of the business proportion. Nobody expects perfection, but you do need to be reasonable.

Toys, books, craft materials, games, puzzles, and any other resources you buy specifically for the children are claimable in full. Same goes for outdoor equipment: water trays, sandpits, garden tools for growing projects. If you bought it for the business, claim it. I keep a simple spreadsheet and photograph receipts as I go, which makes life much easier in January.

Outings and trips are another one a lot of childminders underuse. If you take the children to a farm park, a soft play, or a forest school session, those admission fees are a business expense. Your own entry often counts too, since you need to be there to supervise. The same applies to travel: if you're driving minded children to activities, you can claim mileage at the HMRC approved rate (currently 45p per mile for the first 10,000 miles). Keep a mileage log. It doesn't have to be fancy, a notebook in the car works fine.

Professional fees are fully claimable: your OFSTED registration fee, your PACEY or NCMA membership, public liability insurance, and any professional indemnity cover. First aid course fees are claimable, as are any other training courses and CPD you do for the business. If you're paying for a childminding course or an early years qualification, that counts too.

DBS checks required for you and any assistants in your setting are business expenses. So is stationery, printing, ink cartridges, postage for letters to parents, and any specialist childminding software you pay for. If you've bought resources to help you write your policies and procedures, those costs are legitimate too.

Advertising and marketing are claimable: flyers, a website, local directory listings, any social media advertising you pay for. If you've had photos taken professionally for your setting, that counts.

Accountancy fees, if you use an accountant to help with your return, are also a business expense. Worth remembering.

The home use proportion

This is where it gets slightly more involved. Because childminders work from home, you can claim a proportion of your household running costs: mortgage interest (not capital repayment) or rent, gas, electricity, water, broadband, and council tax.

You calculate this proportion based on the number of rooms in your home, the hours you work, and the days you work. HMRC has a specific formula for this, and the childminder helpsheet on Gov.uk walks you through it. It's not complicated once you've done it once, but it does require some thought.

Alternatively, HMRC's simplified expenses scheme for home working lets you claim a flat rate based on the number of hours per month you work from home. At higher working hours (over 101 hours per month), this is £26 per month. For many full-time childminders, the actual costs method works out better financially, but it depends on your bills and your home setup.

One thing to be aware of: if you claim a proportion of your mortgage interest or council tax, it can affect Capital Gains Tax when you sell your home, because part of it will have been used as business premises. Most childminders are fine because HMRC takes a sensible view on this, but it's worth being aware of if you're planning to move.

What you cannot claim

The "wholly and exclusively" rule bites here. You can't claim:

• Your own food and drink, even if you eat alongside the children
• Personal clothing, unless it's genuinely protective workwear (a branded childminding apron or specific PPE might qualify; your everyday leggings do not)
• The full cost of a mobile phone if you also use it personally (only the business proportion)
• Capital repayments on a mortgage
• Home improvements that benefit the whole house, not just your childminding space
• Gifts for minded children (birthday presents and so on are not allowable expenses)
• Fines or penalties of any kind
• Personal travel unrelated to childminding

The clothing one trips people up regularly. Some childminders buy nice activity aprons or waterproofs that they only wear at work, and those might well be claimable. But general "work-appropriate" clothes aren't, even if you only wear them for childminding. That's been tested in case law and HMRC is firm on it.

Toys or equipment bought primarily for your own children aren't claimable, even if the minded children use them sometimes. The test is whether you'd have bought it anyway for your family. Be honest with yourself on this one.

Record keeping: what you actually need to keep

HMRC requires you to keep records for at least five years after the 31st January submission deadline for each tax year. That means receipts, invoices, bank statements, and any logs you use (mileage, food costs, hours worked from home).

You don't need anything elaborate. A folder of receipts and a simple spreadsheet is genuinely enough for most childminders. The important thing is that you have something you could show if HMRC ever requested a review of your return. They can and do check, and "I thought I could claim it" isn't a defence.

A few practical habits that help: photograph receipts with your phone immediately (apps like Dext are popular for this), keep a petty cash tin specifically for childminding purchases, and do a monthly review rather than leaving everything for January. An hour once a month is far less painful than trying to reconstruct a year's expenses in a panic.

Bank statements are your friend here. If you can run all business income and expenses through a dedicated account or even just a separate debit card, it makes the whole process much cleaner. A business bank account isn't legally required, but a lot of childminders find it makes bookkeeping significantly easier.

The same discipline applies to your wider admin. If you're keeping organised records for Ofsted, for your EYFS documentation, for things like end-of-term reports, you're already in the habit of keeping things properly. Your financial records just need that same approach.

The registration threshold and Making Tax Digital

If your gross income from childminding is over £1,000 in a tax year, you need to register for Self Assessment. Most childminders are well over this. If your profits (income minus expenses) are over £12,570, you'll pay income tax. If they're over £6,725, you'll also pay Class 4 National Insurance. You may also need to pay Class 2 National Insurance, though the rules on this changed from April 2024 and it's worth checking current HMRC guidance or asking an accountant.

HMRC is also rolling out Making Tax Digital for income tax self assessment (MTD for ITSA), which will eventually require quarterly digital reporting rather than an annual return. If your income is over £50,000, this starts in April 2026. The threshold drops to £30,000 in 2027. For most childminders this isn't imminent, but it's coming, and getting into the habit of digital record keeping now isn't a bad idea.

If you're not sure whether your income sits near these thresholds, it's worth doing a rough calculation. Remember it's your gross income (everything parents pay you before expenses) that determines whether you need to register, not your profit.

The practical takeaway from all of this: keep receipts for everything you spend on the children and the setting, use HMRC's childminder helpsheet to work out your home use proportion once a year, track your mileage consistently, and don't overlook the smaller recurring costs like professional memberships and insurance. Those add up to a meaningful reduction in your tax bill over a year. If you're genuinely unsure about anything specific to your situation, an hour with an accountant who understands self-employed childminders is money well spent. They tend to save you more than they cost.