Getting set up as a childminder costs money before a single child walks through your door. Ofsted registration, an enhanced DBS check, paediatric first aid training, public liability insurance, toys, safety gates, a stair gate or two, and the inevitable trip to a wholesaler for snacks.
The good news is that most of that spending can reduce your first tax bill, even though you paid for it before you officially started trading. The catch is that the rules on timing, on grants, and on what counts as a "start-up cost" trip up a lot of new childminders.
This guide explains exactly which start-up costs you can claim, how pre-trading expenses are treated by HMRC, and whether a start-up grant is taxable. It is written for childminders in England, Wales and Northern Ireland registering as sole traders. Figures are for the 2025/26 tax year.
What counts as a childminder start-up cost?
A start-up cost is money you spend getting your childminding business ready to trade. As long as the cost is genuinely for the business, you can usually claim it against your profits, even when you paid for it before your first paid day.
The everyday start-up costs we see for new childminders are:
- Ofsted registration fee (or childminder agency registration).
- Enhanced DBS check for you and any household member over 16.
- Paediatric first aid training and any required early years training.
- Public liability insurance (and often buildings or contents cover for the childminding use).
- Toys, books, craft supplies and play equipment.
- Safety equipment: stair gates, fireguards, cupboard locks, a fire blanket, smoke alarms.
- Travel cots, high chairs, buggies and car seats.
- Initial food and consumables bought to be ready for your first children.
Some of these are day-to-day running costs (insurance, training, small toys). Some are larger items you would expect to last several years (a buggy, a travel cot, garden play equipment), and those are treated as capital. The difference matters for how you claim, which we cover below.
Can you claim costs you paid before you started childminding?
Yes. HMRC lets you claim qualifying pre-trading expenses, and treats them as if you spent the money on your first day of trading.
That is the answer most new childminders are looking for, so it is worth saying plainly: spending in the run-up to your start date is not lost. The legislation lets you relieve revenue expenditure incurred in the seven years before the trade begins, as long as the cost would have been allowable if you had already been trading when you paid it. HMRC's guidance confirms that qualifying pre-trading expenditure is "treated as incurred on the day on which the trade, profession or vocation is first carried on" and goes into the first year's profit calculation (see BIM46355).
In plain terms: keep every receipt from the moment you decide to become a childminder, even if registration takes months. When you do your first tax return, those costs land on day one of trading and reduce your first year's taxable profit.
What is the difference between revenue and capital start-up costs?
This is the distinction that decides how you claim, not whether you claim.
- Revenue costs are the running-type expenses: insurance, registration, training, small toys, consumables. Under the pre-trading rule these are simply added to your first year's expenses.
- Capital costs are larger items that last (a travel cot, a buggy, a garden playhouse, a second-hand car used for the business). These are claimed as capital allowances or, if you use the cash basis, deducted when you pay for them.
Most new childminders are now on the cash basis by default. From the 2024/25 tax year, the cash basis is the standard method for sole traders, and you only opt out if you want traditional (accruals) accounting (gov.uk: cash basis). On the cash basis you generally just deduct the cost of equipment in the year you pay for it, rather than working through separate capital allowance pools, which keeps childminder bookkeeping much simpler.
Is a childminder start-up grant taxable?
It depends on what the grant is for. A grant that meets running costs is normally taxable trading income, while a grant that meets capital costs normally is not. A grant received before you start trading is not a trade receipt, but it can reduce the pre-trading expenses you claim.
HMRC's general rule on grants is short and clear. As BIM40451 puts it: "Grants which meet revenue expenditure, such as interest payable, are normally trading receipts," and "Grants which meet capital expenditure are normally not trading receipts."
For childminders specifically, BIM52751 confirms that grants to help start up or to meet capital or running costs are dealt with under those normal principles, and that "a start up grant may reduce the amount of pre-trading expenditure on which relief is available."
What that means in practice:
- A grant that covers revenue spending (training, insurance, consumables) is generally taxable as income, or it reduces the matching pre-trading expense you would otherwise have claimed.
- A grant that covers a capital item generally is not taxable, but it reduces the cost you can claim for that item.
Either way, you do not get tax relief twice. You cannot claim a £600 cost in full and also keep a £600 grant tax-free against the same cost.
The government childminder start-up grant has closed
You may have read about the £600 (Ofsted) or £1,200 (childminder agency) government start-up grant. That scheme is now closed. The official gov.uk page states the scheme "ran from 30 November 2023 to 31 March 2025 and is now closed" (gov.uk: apply for a childminder start-up grant). The amounts were £600 for registering with Ofsted and £1,200 for registering with a childminder agency, paid in two instalments (gov.uk scheme update).
If you received that grant while it was open, the taxability rule above still applies. If a local authority or agency offers a different grant now, check what it is actually for (revenue or capital) and treat it the same way.
Illustrative example: a new childminder's first-year tax position
Let's work through a realistic set of figures. This is an illustrative example using a generic childminder, Sara, who registers in 2025/26.
Sara spends the following before her first paid child in the 2025/26 tax year:
| Start-up cost | Amount | Type |
|---|---|---|
| Ofsted registration | £220 | Revenue |
| Enhanced DBS check | £58 | Revenue |
| Paediatric first aid course | £85 | Revenue |
| Public liability insurance (year 1) | £75 | Revenue |
| Toys, books and craft supplies | £240 | Revenue |
| Safety equipment (gates, guards, alarms) | £130 | Capital |
| Travel cot, high chair and buggy | £290 | Capital |
| Total start-up spend | £1,098 |
Under the pre-trading rule, all £1,098 is treated as incurred on her first day of trading. On the cash basis, the capital items (£420) are simply deducted when paid, so the full £1,098 reduces her first-year profit.
Say Sara then earns £9,400 of childminding income in her first year and has £3,100 of other allowable running costs (food, use of home, more consumables). Her taxable profit is:
£9,400 income − £1,098 start-up costs − £3,100 running costs = £5,202 profit
Her profit of £5,202 is below the £12,570 personal allowance for 2025/26, so she pays no Income Tax on it (gov.uk: Income Tax rates). It is also below the Class 4 National Insurance Lower Profits Limit of £12,570, so no Class 4 NIC is due (gov.uk: self-employed National Insurance).
Now assume Sara had received a £200 grant specifically to cover her first-aid and insurance costs (both revenue). That grant reduces the matching pre-trading expense, so she claims £898 of start-up costs instead of £1,098. Her profit becomes £5,402, still comfortably within the personal allowance. The grant has not created a tax bill here, but it has correctly reduced the relief, so she is not claiming the same spending twice.
Should you use the £1,000 trading allowance instead?
If your gross childminding income is £1,000 or less in the tax year, you usually do not need to tell HMRC about it at all, because of the trading allowance (gov.uk: trading allowance).
If your income is more than £1,000, you can choose to deduct the £1,000 trading allowance instead of your actual expenses. For a new childminder with heavy start-up costs, that is usually the wrong choice, because real expenses (registration, training, equipment, food, use of home) typically come to far more than £1,000. You cannot claim the £1,000 allowance and your expenses, so most childminders are better off claiming actual costs in year one. Our childminder trading allowance decision guide walks through both routes.
How do start-up costs interact with Making Tax Digital from April 2026?
The start-up and pre-trading rules above are unchanged by Making Tax Digital. What MTD changes is the special childminder shortcuts for ongoing household costs.
HMRC updated BIM52751 in March 2026 to reflect MTD for Income Tax. The guidance now states that the long-standing childminder agreement, including the 10% wear-and-tear allowance and the hours-based percentages for household running and fixed costs, does not apply to childminders within MTD for Income Tax from April 2026. Those childminders must follow the standard self-employed expense rules instead (BIM52751; ICAEW summary).
You are brought into MTD for Income Tax based on your qualifying income (all self-employment plus property combined):
| MTD for Income Tax phase | Qualifying income over | From |
|---|---|---|
| Phase 1 | £50,000 | 6 April 2026 |
| Phase 2 | £30,000 | 6 April 2027 |
| Phase 3 | £20,000 | 6 April 2028 |
Source: gov.uk: check when to sign up for MTD for Income Tax.
Why this matters for a brand-new childminder: in your first year your income is usually well below these thresholds, so you are very unlikely to be in MTD yet, and the special percentages and wear-and-tear allowance remain available to you. But it is worth knowing the shortcuts are being phased out as your income grows. For the detail, see our guides on MTD for Income Tax for childminders and the 10% wear-and-tear allowance under MTD. If you are setting up your records from scratch, our childminder bookkeeping guide shows a simple system that will carry you into MTD without a painful switch later.
What records should you keep for start-up costs?
Keep everything, and keep it from the moment you decide to childmind.
- Receipts and invoices for every start-up purchase, even small ones.
- Dates of each cost, so you can show it falls inside the seven-year pre-trading window.
- Your trading start date, which is the first day you are ready and available to take children, not necessarily your first paid booking.
- Any grant paperwork, showing what the grant was for (this decides the tax treatment).
- A simple spreadsheet or app listing each cost, the amount, and whether it is revenue or capital.
For small food and sundry items HMRC accepts reasonable estimates without receipts where receipts are not practical, but keep receipts for anything substantial. Tidy records make your first tax return quick and stop you missing relief you are entitled to.
Key takeaways
- Most childminder start-up costs are claimable, including spending in the run-up to your start date.
- Qualifying pre-trading revenue costs from the seven years before you start are treated as incurred on your first trading day.
- A grant for running costs is generally taxable income; a grant for capital generally is not, but it reduces the cost you can claim. You never get relief twice.
- The government £600/£1,200 start-up grant scheme closed on 31 March 2025.
- Start-up and pre-trading rules are unchanged by MTD. MTD only removes the special childminder percentages and 10% wear-and-tear allowance once you are inside it (from April 2026 for income over £50,000).
- Keep dated receipts for everything from day one.
FAQs
Can I claim start-up costs if I paid for them before registering with Ofsted?
Yes. Qualifying revenue costs incurred in the seven years before you start trading are treated as spent on your first trading day and reduce your first year's profit, provided they would have been allowable had you already been trading.
Is the childminder start-up grant taxable?
It depends on what the grant funds. A grant covering running costs is normally taxable trading income; a grant covering a capital item normally is not. Either way it reduces the matching expense you can claim, so you cannot get relief twice. The government's own £600/£1,200 scheme closed on 31 March 2025.
Can I still use the 10% wear-and-tear allowance as a new childminder?
If you are not yet within Making Tax Digital for Income Tax, yes, the special childminder agreement (including the 10% wear-and-tear allowance) still applies. Once you are within MTD, from April 2026 for qualifying income over £50,000, you must use standard self-employed expense rules instead.
Are toys and equipment a start-up cost or capital?
Small, short-life items like craft supplies and cheap toys are revenue costs. Larger items expected to last several years, such as a travel cot, buggy or garden playhouse, are capital. On the cash basis, most childminders simply deduct equipment when they pay for it.
Should I claim the £1,000 trading allowance or my actual expenses?
If your gross income is £1,000 or less you usually do not need to report it. Above £1,000 you can claim either the £1,000 allowance or your actual expenses, but not both. New childminders with real start-up costs above £1,000 are almost always better claiming actual expenses.
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