If you're a childminder, your books shouldn't eat into the hours you'd rather spend with the children. The good news is that you don't need fancy software or an accountancy degree to keep them right. You need a simple, repeatable routine and somewhere consistent to write things down.
This guide shows you a system you can run in a few minutes a week, gives you a free template to copy, and explains exactly what HMRC expects you to keep. It also flags the one big change coming in: from April 2026, childminders inside Making Tax Digital for Income Tax lose some of the long-standing shortcuts, so the way you record things now matters more than it used to.
It's written for self-employed childminders in England, Wales and Northern Ireland working as sole traders. If that's you, you're in the right place.
What bookkeeping does a childminder actually need?
Bookkeeping just means keeping an orderly record of money coming in and money going out, with proof to back it up.
For a childminder that's mostly two things: the fees parents pay you, and the costs of running your setting. Get those two lists right and your tax return becomes a quick summary rather than a panicked shoebox hunt every January.
You don't legally have to use any particular tool. HMRC cares that your records are complete and accurate, not whether they live in a spreadsheet, an app, or a paper book.
What records does HMRC say you must keep?
If you're self-employed, HMRC requires you to keep records of all your business income and expenses so you can fill in your Self Assessment return correctly. You also need to keep them for long enough: at least five years after the 31 January submission deadline for the relevant tax year.
For childminders specifically, there are two helpful relaxations in HMRC's guidance:
- Food and drink for the children. You do not need to keep receipts for food and drink you provide to the children you care for. A reasonable estimate is acceptable.
- Small items. You do not need to keep receipts for individual items that cost less than £10. If you buy several small items together and they total £10 or more, keep that receipt.
Everything else, larger purchases, your mortgage interest or rent, utility bills, insurance, Ofsted and DBS fees, follows the normal rule: keep the evidence.
What's the simplest bookkeeping system that works?
The system that actually gets done is the one you can do in minutes, not hours. Here's a four-step weekly routine.
- Log income as it arrives. Every time a parent pays you, write the date, the child or family, the amount, and how they paid (bank transfer, cash, voucher, funded hours). Do it the day it lands.
- Capture expenses on the spot. When you buy something for the setting, jot it straight into your records and photograph the receipt if you need to keep one.
- Do a weekly tidy-up. Once a week, ten minutes is plenty, reconcile what you've logged against your bank statement so nothing slips through.
- Total it up monthly. Add up the month's income and expenses. This keeps the year-end painless and tells you how the business is doing.
Whether you use the template below, a notebook, or bookkeeping software is up to you. The routine is what matters.
What goes in your free childminder bookkeeping template?
You can build the whole thing in a free spreadsheet in about ten minutes, and reuse it every year. Set up three tabs.
Tab 1 - Income. One row per payment.
| Column | What to enter |
|---|---|
| Date | The date the money arrived |
| Child / family | Whose fees this covers |
| Amount (£) | What you received |
| Type | Private fees, funded hours, voucher, etc. |
| How paid | Bank, cash, app |
Tab 2 - Expenses. One row per cost.
| Column | What to enter |
|---|---|
| Date | The date you paid |
| Supplier | Where you bought it |
| Amount (£) | What you spent |
| Category | Food, toys, insurance, fees, motoring, home costs |
| Receipt kept? | Yes / No (No is fine for food and sub-£10 items) |
Tab 3 - Summary. A simple monthly total of income, total of expenses, and the difference (your profit). That profit figure is broadly what you'll be taxed on.
Want this ready-made? Our team can send you a copy of the Zmartly childminder bookkeeping template, set up exactly like this, free of charge. There's a link at the end of this guide.
How do you record income correctly?
Record the full amount a parent pays you, on the date you receive it. That includes private fees, deposits, and late-payment charges.
Two areas trip childminders up:
- Funded and free hours. Payments you receive for government-funded or free childcare hours are ordinary business income. Log them just like private fees.
- Tax-Free Childcare and voucher payments. When a parent pays your fees through Tax-Free Childcare or a childcare voucher scheme, that money is still your fee income. Record it as income in the normal way; it's only the parent's method of paying you.
If your total gross self-employed income for the year is £1,000 or less, you may not have to report it at all, thanks to the £1,000 trading allowance. Gross income here means the total before you take off any expenses. There are exceptions, for example if you want to pay voluntary National Insurance to protect your state pension, or if you need to claim certain benefits, you may still need to register and file. Most working childminders earn well above £1,000, so this mainly helps in a quiet first part-year.
How do you record expenses (and the childminder shortcuts)?
Childminders have long had a bespoke arrangement with HMRC that simplifies the trickiest costs, the ones you share between your business and your household.
For the 2025/26 tax year, if you are not yet inside Making Tax Digital, HMRC's published guidance lets you claim:
- Running costs (things like gas, electricity and water) on a sliding scale by hours worked. If you care for children in your own home for 40 or more hours a week, you can claim 33% of those running costs. Below 40 hours, you scale it down: divide your weekly hours by 40, multiply by 33, and round up.
- Fixed costs (such as council tax, rent, mortgage interest and insurance) at 10% at 40+ hours a week, scaled the same way (divide your hours by 4 and round up).
- Wear and tear. You can claim 10% of your income from caring for children in your own home to cover wear and tear on furniture and household items.
- Food and drink for the children, by reasonable estimate, with no receipts needed.
You then add the everyday business costs in full: toys and equipment, Ofsted registration, enhanced DBS checks, paediatric first aid training, public liability insurance, and subscriptions.
For motoring, you can use HMRC's simplified mileage rate instead of working out actual running costs: for 2025/26 that's 45p per mile for the first 10,000 business miles in the year and 25p per mile after that. Keep a simple log of business journeys (nursery runs, trips to buy supplies, outings with the children).
The reason your records need to be tidy is that these percentages are applied to real figures from your books. Good bookkeeping is what lets you claim them confidently.
What changes under Making Tax Digital from April 2026?
This is the big shift, so it's worth getting right.
Answer: Once you're inside Making Tax Digital for Income Tax, HMRC's special childminder shortcuts no longer apply. You can't use the hours-based 33% / 10% percentages or the flat 10% wear-and-tear deduction. Instead you follow the standard rules every other self-employed business uses: work out the genuine business proportion of each cost and claim that.
Here's the timing. Making Tax Digital for Income Tax is being phased in by qualifying income, which is your combined gross income from self-employment and property:
| Your qualifying income is over | Based on tax year | You must use MTD from |
|---|---|---|
| £50,000 | 2024/25 | 6 April 2026 |
| £30,000 | 2025/26 | 6 April 2027 |
| £20,000 | 2026/27 | 6 April 2028 |
So most childminders, whose income sits below £50,000, won't be pulled in on the first wave. If that's you, you can carry on using the bespoke percentages and the 10% wear-and-tear deduction as before for now. HMRC's guidance was updated on 18 March 2026 to confirm this split: the alternative methods stay available to childminders who are not within Making Tax Digital, and those who are within it must use the standard approach.
Practically, the move under MTD is from estimating to evidencing. You'll need to keep digital records and, instead of a flat 10% for wear and tear, claim the actual business proportion of furniture and equipment you buy and replace. That's not necessarily worse, but it does mean your bookkeeping has to capture more detail. Building the habit now, with the template above, makes that transition painless when your turn comes.
Because the thresholds depend on your own figures and HMRC's timetable can be updated, it's worth checking your position each year rather than assuming.
A worked example for a full year
Illustrative example. Aisha is a childminder working from her own home, around 45 hours a week, across the 2025/26 tax year. She is not within Making Tax Digital. Her figures are made up to show the method.
Her income for the year:
| Income | Amount |
|---|---|
| Private fees | £19,800 |
| Funded-hours payments | £4,200 |
| Total childminding income | £24,000 |
Her costs. Because she works 40+ hours a week, she uses the full percentages:
| Expense | Working | Amount |
|---|---|---|
| Toys, equipment, subscriptions (in full) | actual | £1,300 |
| Insurance, Ofsted, DBS, first aid (in full) | actual | £500 |
| Food for the children (reasonable estimate) | actual | £1,800 |
| Running costs (gas, electricity, water) at 33% | £3,000 x 33% | £990 |
| Fixed costs (council tax, mortgage interest) at 10% | £6,000 x 10% | £600 |
| Wear and tear at 10% of income | £24,000 x 10% | £2,400 |
| Total expenses | £7,590 |
Her taxable profit is £24,000 minus £7,590, which is £16,410.
That profit sits above the £12,570 personal allowance for 2025/26, so the slice above it is taxable at the 20% basic rate, and Class 4 National Insurance applies at 6% on profit above the £12,570 lower profits limit. The exact bill depends on her other income, but the point is this: every figure came straight from her books. That's what good bookkeeping buys you.
Frequently asked questions
Do childminders need an accountant to do their bookkeeping?
No. Plenty of childminders keep their own books with a simple spreadsheet or app and file their own Self Assessment return. An accountant becomes worthwhile when your situation gets more complex, when you're moving into Making Tax Digital, employ an assistant, or simply want to be sure you're claiming everything correctly and not overpaying.
What's the best software for childminder bookkeeping?
There's no single best option, and you're not required to use software at all until Making Tax Digital applies to you. A free spreadsheet works fine for most childminders today. Once you're inside Making Tax Digital for Income Tax, you'll need to keep digital records and use MTD-compatible software to submit updates, so it's sensible to choose a tool you're comfortable with before then.
How long do I have to keep my childminding records?
Keep your records for at least five years after the 31 January Self Assessment deadline for that tax year. So records for 2025/26, due by 31 January 2027, should be kept until at least 31 January 2032.
Do I record funded hours and Tax-Free Childcare payments as income?
Yes. Government-funded hours are ordinary business income, and money parents pay through Tax-Free Childcare or voucher schemes is still your fee income. Record all of it as income in your books.
Can I still use the 10% wear-and-tear deduction?
For 2025/26, yes, if you are not within Making Tax Digital for Income Tax. HMRC's guidance, updated on 18 March 2026, confirms childminders outside MTD can continue to claim 10% of their home-based childminding income for wear and tear. Once you're inside MTD, that flat deduction goes and you claim the actual business proportion of furniture and household items instead.
Talk to a bookkeeping specialist →
Key takeaways
- A weekly ten-minute routine, log income, capture expenses, reconcile, total monthly, is all the system most childminders need.
- Build a free three-tab spreadsheet: Income, Expenses, Summary. Reuse it every year.
- You don't need receipts for the children's food and drink, or for individual items under £10.
- For 2025/26, if you're not in Making Tax Digital, you can still use the 33% / 10% hours-based percentages and the 10% wear-and-tear deduction.
- From the date Making Tax Digital applies to you, those shortcuts stop and you switch to evidencing the actual business proportion of shared costs.
Want our ready-made childminder bookkeeping template, plus a quick check that you're claiming everything you should? Talk to a Zmartly accountant about bookkeeping support for childminders and we'll send the template over free. You can also see how we help childminders specifically on our childminder accountant page, and work out your likely tax with our self-employed tax calculator.
