You've registered with Ofsted, the children are settling in, and the income is starting to come through. Now there's the bit nobody warns you about properly: telling HMRC about it.
If this is your first year childminding, you'll almost certainly need to file a Self Assessment tax return. The good news is that childminding has some of the friendliest expenses rules in the whole tax system, and once you know the steps, your first return is far less daunting than it looks.
This guide walks you through it in order: when to register, what to record, the special childminder expenses you can claim, and how to file. It's written for self-employed childminders in England, Wales and Northern Ireland for the 2025/26 tax year. (Scotland sets some of its own Income Tax rates, so a few figures differ there.)
Do childminders need to file a Self Assessment tax return?
If you earn more than £1,000 a year from childminding, you're self-employed for tax and you need to register for Self Assessment and file a return. Below £1,000, the trading allowance usually covers you and you may not need to file at all.
Most working childminders are well over that £1,000 mark, so a return is the norm rather than the exception. You report your childminding income, claim your expenses, and HMRC works out the tax and National Insurance due on your profit.
Table of contents
- Do childminders need to file a Self Assessment tax return?
- When do I need to register as a childminder for Self Assessment?
- What records should a childminder keep?
- What expenses can a childminder claim?
- How do the special childminder percentages work?
- What is changing under Making Tax Digital from April 2026?
- How do I work out my tax bill? An illustrative example
- How do I actually file my first return?
- What are the deadlines and penalties?
- Frequently asked questions
When do I need to register as a childminder for Self Assessment?
You must tell HMRC that you need to complete a tax return by 5 October following the end of the tax year in which you started childminding. The tax year runs from 6 April to 5 April.
So if you started taking childminding income during the 2025/26 tax year (6 April 2025 to 5 April 2026), your deadline to register is 5 October 2026.
Registering is free and you do it online at gov.uk. HMRC sets you up for Self Assessment and sends you a Unique Taxpayer Reference (UTR), a 10-digit number you'll need every year, plus an activation code for your online account. Allow a couple of weeks for the post, so don't leave registration to the last day.
A quick note on terms: you register as self-employed (a sole trader). You do not need a limited company to childmind, and for most childminders a company is the wrong choice because it loses access to the home-cost rules below. We cover that decision in our wider guidance for childminders.
What records should a childminder keep?
Tax returns are far easier when your figures are already written down. You don't need fancy software to start. A simple spreadsheet or notebook works, as long as you record:
- Income: the fees each parent pays you, including any retainers and late-collection charges.
- Funded hours: payments you receive for free or funded early-years places. These count as ordinary childminding income.
- Expenses: what you spend on the children and on running your setting, with the date and amount.
Childminding has a helpful concession on receipts. For items costing less than £10, you don't need to keep a receipt. If you buy several small items in one go and they total £10 or more, you do need the receipt. And for the food and drink you give the children, reasonable estimates are accepted and receipts are not required at all.
Keep your records for at least five years after the 31 January filing deadline, in case HMRC asks to see them.
What expenses can a childminder claim?
You only pay tax on your profit, which is your income minus your allowable business expenses. Childminders can claim the usual self-employed costs, including:
- Ofsted registration fee and your enhanced DBS check.
- Paediatric first aid and other required training.
- Public liability insurance.
- Toys, books, craft materials, and play equipment.
- A share of your phone, broadband, and stationery used for the business.
- Mileage for business journeys (school runs, trips, outings) at HMRC's flat rate of 45p per mile for the first 10,000 business miles in the year, then 25p per mile after that.
Start-up costs you incurred before your first child arrived (your registration, DBS, first aid, insurance, and initial equipment) are allowable too. They're treated as if spent on the first day of trading.
On top of these, childminders have two bespoke reliefs that most other self-employed people don't get: the hours-based household cost percentages and the 10% wear-and-tear allowance. These come from a long-standing agreement between HMRC and the childminding sector. Here's how they work.
How do the special childminder percentages work?
When you childmind from your own home, part of your heating, lighting, water, council tax, rent and similar bills relates to the business. Rather than make you measure exactly how much, HMRC lets childminders claim a flat percentage based on the hours they work each week.
There are two pots: running costs (such as heat, light and water) and fixed costs (such as council tax and rent). A full-time childminder working 40 or more hours a week claims 33% of running costs and 10% of fixed costs. Below 40 hours, you scale it down.
| Hours worked per week | Running costs claimable | Fixed costs claimable |
|---|---|---|
| 10 | 9% | 3% |
| 15 | 13% | 4% |
| 20 | 17% | 5% |
| 25 | 21% | 7% |
| 30 | 25% | 8% |
| 35 | 29% | 9% |
| 40 or more | 33% | 10% |
On top of those, you can claim the wear-and-tear allowance: a flat 10% of your childminding income to cover the wear on your furniture and household items. If you claim this 10%, you can't also claim the cost of replacing those items separately, so it's one or the other.
These percentages and the 10% allowance apply to the share of your home and your income that relates to childminding from home. They're the reliefs that make childminding tax so distinctive, and for most childminders they're more generous and far less fiddly than working everything out by the room.
There's an important change coming, though, and it depends on Making Tax Digital.
What is changing under Making Tax Digital from April 2026?
Making Tax Digital for Income Tax (often shortened to MTD ITSA) is HMRC's move to digital record-keeping and quarterly updates. It's being rolled out in stages based on your qualifying income, which is your gross income from self-employment and property combined, before expenses:
| You must use MTD for Income Tax from | If your qualifying income was over | Based on tax year |
|---|---|---|
| 6 April 2026 | £50,000 | 2024/25 |
| 6 April 2027 | £30,000 | 2025/26 |
| 6 April 2028 | £20,000 | 2026/27 |
Many childminders earn below these thresholds, so plenty won't be drawn in for a year or two yet. But the rules matter the moment you are.
On 18 March 2026, HMRC updated its childminder guidance to confirm a key point: once you are within Making Tax Digital for Income Tax, you can no longer use the bespoke hours-based percentages or the 10% wear-and-tear allowance. Instead you move to standard rules, claiming the actual business proportion of your household costs and the actual cost of wear and tear and replacements.
The reliefs themselves don't vanish. As the updated gov.uk guidance puts it, you can still claim tax relief on all your business expenses if you use Making Tax Digital for Income Tax. What changes is the method: actual apportionment in place of the flat percentages.
So for now, in 2025/26, if you're not yet in MTD, the percentages and the 10% allowance still apply. If you're being brought into MTD from April 2026, plan to keep fuller records of your actual home costs so you can apportion them properly. If you're unsure which side of the line you fall, that's exactly the kind of thing to check before your first return rather than after.
How do I work out my tax bill? An illustrative example
Illustrative example. Sarah is a full-time childminder, working 45 hours a week from her home, and 2025/26 is her first full year. She's not within Making Tax Digital, so the special percentages apply. Her figures for the year:
- Childminding income: £24,000
- Running-cost bills (heat, light, water): £2,400, so she claims 33% = £792
- Fixed-cost bills (council tax, rent): £6,000, so she claims 10% = £600
- Wear-and-tear allowance: 10% of £24,000 = £2,400
- Toys, equipment, training, insurance and food: £3,200
- Business mileage: 1,000 miles at 45p = £450
Her total expenses are £792 + £600 + £2,400 + £3,200 + £450 = £7,442.
Her profit is £24,000 minus £7,442 = £16,558.
For 2025/26, the personal allowance (the amount you can earn before paying Income Tax) is £12,570. So Sarah pays the 20% basic rate of Income Tax on £16,558 minus £12,570 = £3,988, which is £797.60 of Income Tax.
She also pays Class 4 National Insurance at 6% on profit above the £12,570 lower profits limit, so 6% of £3,988 = £239.28. Her Class 2 NI record is maintained automatically because her profit is above the Small Profits Threshold, with nothing extra to pay.
Sarah's total bill for the year is roughly £797.60 + £239.28 = £1,036.88. The exact figures depend on her own numbers, but it shows how the childminder reliefs pull a £24,000 turnover down to a modest tax bill.
If you'd like to sanity-check your own numbers, our self-employed tax calculator gives you a quick estimate before you file.
How do I actually file my first return?
Once you're registered and have your UTR and online account set up, filing is a sequence of clear steps:
- Sign in to your HMRC online account and start the Self Assessment return for the right tax year.
- Add the self-employment pages, where you enter your childminding income and your expenses.
- Enter your income and expenses. If your turnover is under £90,000 you can usually enter a single total for expenses rather than itemising every category, but keep the breakdown in your records.
- Check the tax and NI HMRC calculates from your figures.
- Submit, then make a note of the tax due and the date.
You file online by 31 January after the tax year ends. For 2025/26, that's 31 January 2027.
If reading that list makes your heart sink, you're not alone. A first return is the one people most often get wrong, usually by missing the childminder percentages or muddling funded-hours income. This is where having an accountant who actually knows the childminding rules pays for itself. You can see how we help on our Self Assessment service for childminders page.
What are the deadlines and penalties?
Mark these dates for any tax year. Using 2025/26 as the worked example:
| What | Deadline | 2025/26 date |
|---|---|---|
| Register for Self Assessment | 5 October after the tax year | 5 October 2026 |
| Paper tax return | Midnight 31 October after the tax year | 31 October 2026 |
| Online tax return | Midnight 31 January after the tax year | 31 January 2027 |
| Pay your tax bill | Midnight 31 January after the tax year | 31 January 2027 |
Miss the online filing deadline and you get an initial £100 penalty even if you owe no tax. After three months, daily penalties of £10 a day can build up to a maximum of £900, with further penalties at six and twelve months. Filing on time, even with figures you later amend, is always better than filing late.
If your bill is over £1,000, you may also be asked to make payments on account towards next year's tax, due 31 January and 31 July. Your first return often feels like a double hit because of this, so it's worth setting money aside as you go.
Frequently asked questions
Do I pay tax on funded hours and free childcare places?
Yes. Payments you receive for funded or free early-years places are ordinary childminding income and go on your tax return like any other fee. The funding is treated the same as a parent paying you directly.
Can I use the £1,000 trading allowance instead of claiming expenses?
You can, but it's an either/or choice. If you use the £1,000 trading allowance you cannot also claim your expenses. For most working childminders, the real expenses plus the special percentages come to far more than £1,000, so claiming expenses gives a lower tax bill. The allowance mainly helps very part-time childminders with small incomes.
Should I register as a limited company to save tax?
Almost never. A limited company loses access to the childminder home-cost agreement and the wear-and-tear allowance, and you'd have to re-register with Ofsted under the company. For the vast majority of childminders, staying a sole trader is both simpler and more tax-efficient.
Do the special childminder percentages still apply in 2025/26?
Yes, if you're not yet within Making Tax Digital for Income Tax. The hours-based percentages and the 10% wear-and-tear allowance continue to apply. From the point you join MTD, you switch to claiming the actual business proportion of your costs instead.
How much should I set aside for tax?
It depends on your profit, but putting aside around 20% to 25% of your profit (not your turnover) is a sensible starting buffer for most basic-rate childminders. That covers Income Tax and Class 4 National Insurance with a little room to spare. Check your own position rather than relying on a rule of thumb.
Get help with your tax return →
Get your first childminder tax return right
Your first Self Assessment is the one worth getting right, because it sets the pattern for every year after. If you'd rather hand it to someone who knows the childminder rules inside out, including the percentages and the changes coming with Making Tax Digital, we can help.
Book a free 20-minute call with a Zmartly accountant through our childminder accountancy service, and we'll make sure your first return is accurate, on time, and as low as it should legitimately be.
