Childminding: Tax Allowances
The question
To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential impact of the removal of the 10% wear and tear allowance for child minders within Making Tax Digital on the level of complexity for users of the system.
Answered by Dan Tomlinson
At Budget 2025 the Government confirmed that the standard rules for calculating income tax would apply to childminders within Making Tax Digital (MTD) for Income Tax. We will phase in this change between 2026 and 2028, in line with MTD for Income Tax thresholds. The threshold from April 2026 is £50,000 of qualifying income, reducing to £30,000 from April 2027 and £20,000 from April 2028.
Childminders can continue to claim tax relief for wear and tear by deducting the actual cost of buying, repairing or replacing items. They can also deduct the cost of business expenses such as utilities, cleaning and equipment. This ensures childminders receive tax relief for all of the costs that they incur in relation to their childminding business.
HMRC engaged with stakeholders before the Budget and continue to engage with them, and will produce updated guidance for childminders in early 2026. Guidance on business expenses and on MTD for Income Tax is already available on GOV.UK.
Childminders play a vital role in childcare. The Government has eased rules on working from schools and community centres and increased early years funding rates above 2023 average fees. These increases reflect increased costs, and from April 2026, local authorities must pass at least 97 per cent of funding to providers.
Verbatim has judged this answer against the question that was actually asked — answered, partly answered, or evaded. Sign in to see the verdict →