As a childminder, you can claim certain expenses back from the HMRC to reduce your tax bill. The rules may change so it is important to keep upto date with any changes or restrictions.
Currently the following items can be claimed:
- startup expenses
- day to day expenses (HMRC call these revenue expenses)
- capital expenses/allowances (large items which are subject to depreciation)
Startup Expenses include the following:
House prep
- Fences and gates with padlocks
- Grill covers for drains
- First aid boxes and contents
- Fire safety resources and contents
- Safety equipment – moving locks on doors, stair gates, toddler reins or wrist straps, warning stickers
Registration costs
- Doctors’ fees
- Training course cost
- Ofsted registration fee
Equipment
- Buggies
- Car seats
- Play equipment (indoor /outdoor)
- Toys
- Disability or cultural resources
Business costs
- Early Tracker recording system / or paper based recording system
- Complaints book, visitors log book, registers, medical book, injuries log etc. unless part of Electronic system like Early Tracker
- Public Liability Insurance
- Printing costs for business cards / flyers,
- Printer ink for policies and procedures, permission forms unless using electronic version as in Early Tracker System
- Advertising – websites etc.
Day to Day expenses include the following:
Household Expenses
You are allowed to claim on some of your household bills as you are working from home, such as a percentage of your heating, lighting, water, council tax, rent, etc. depending on the hours you are childminding.
You can also claim 10% for wear and tear at the house you are childminding in.
But remember to keep a copy of all your original bills
This is based on a 40 hour working week.
Mortgage interest Payments
If your domestic space doubles up as business space then you cannot claim for mortgage expenses, however, if parts of your house are designated to childminding only, such as specific rooms have been arranged into childminding areas or the garage has been converted then a portion of your mortgage can be reclaimed as an expense.
However, this requires careful consideration as this would also mean you may become liable for:
Capital Gains Tax (if you sell your house)
And may have to pay business rates or council tax
Boiler or other maintenance agreement at 33% annual charge
Council tax – 10% of annual bill
Rent – 10% of annual bill used for childminding
Water rates – 10% of annual bill
Cleaning costs
- Carpet cleaning for rooms where children are minded
- Cleaner for rooms children use
- Oven cleaning
- Furniture cleaning – sofas in childminding rooms only
Sundries
Cleaning items such as disinfectant, towels, kitchen rolls, washing up liquid, bin liners etc.
Stationary
- Pencils, pen, erasers, envelopes, stamps
- Photographs for parent
- Computer, tablet, Printer, printer ink, paper for childminding paperwork
- Presents, cards, wrapping material etc.
Telephone
Whether you use a mobile or landline, you can claim part of your line rental or the business calls you make.
You can claim 10% of a domestic landline annual bill if it is also used for childminding and an itemized bill, unless you have a dedicated phone line for business alone.
If you do not get itemized bills as in mobile ‘pay as you go’, you need to estimate what percentage of your phone and calls is used for business alone.
In order words if 80% of your mobile phone is used for business and 20% for personal, then:
For a £100 phone used 80% for business, you can claim
80% x £100 = £80 for the cost of the phone
For £200 cost of top up vouchers
80% x 200 = £160 for the cost of the top ups
However, if you have a designated phone for business then the full costs can be claimed.
Broadband
The cost of internet can also be claimed, but if this is also used for domestic purposes then only a percentage can be claimed.
Electricity/gas
If you prepare food then you can claim back 33% of your annual bill for food preparation
TV Licence
Only if the TV is solely used for the purpose of child-minding
Public Transport
If you use public transport to take children to outings like play centres of shops then you must keep your tickets as proof of travel unless the costs came to less than £10
Own Transport
If you use your own car for travel, you must decide whether you are going to claim costs or claim mileage. You cannot do both.
If you claim mileage you can charge 45p per business mile for the first 10000 and then 25p thereafter. This includes all the running costs such as fuel, insurance, tax, repairs etc.
If you are using a motorbike for your childminding business, then it is 24p per business.
It is a good idea to keep a book in your car to log your mileage down or log it in your phone.
If you have Early Tracker you can log it straight on to the Early Tracker system.
If however, you decide to claim a percentage of the costs then you can claim a percentage of:
- MOT
- Cleaning
- Valeting
- Car wash
- Service
- Repairs
- AA/RAC breakdown cover
Meals /Snacks
HMRC will accept ‘reasonable estimates for food and drink provided for children being minded’
However if you provide meals they can be calculated as follows:
You can calculate this per meal for example:
Packet of Pasta £1.50
500g mince £4.00
1 onion £0.20
Tin of tomatoes £0.50
½ tube of tomato puree £0.50
2 carrots £0.40
Total: £7.10 for 5 children = £1.42 for each child
You do not need food receipts for the Inland Revenue but you will need them for Environmental Health inspectors.
General expenses
Toiletries (such as nappies, wipes etc), toys, craft resources, books, baby cutlery/crockery etc. that you need to pay for during the course of your day can be claimed.
If the items are used also for domestic use then the cost needs to be split to reflect the percentage used for business alone.
Toys etc. costing more than £10 will need a receipt.
Remember large items should be logged as a capital expense and shown on your tax return, not as a general expense.
Equipment – specialist equipment or normal equipment
To comply with disabilities or children’s needs
Safety alterations required by Ofsted
Safety equipment – highlighted by risk assessments
Electronic Toys:
Wii, Nintendo etc. can be claimed if minded children use it or for a percentage that the children use it.
Gardener
Only if they maintain your outside premises that minded children use.
Professional development
- Training courses, also travel to and from course, also extra 5p per mile if giving colleague a lift
- Books about childcare
- Magazines
Extras
If you take children to play centres, zoo, cinema, theatre, birthday parties, swimming pool etc. and need to pay for admission that is not passed on to parents because you offer an all-inclusive fee, then these costs can be claimed back as business expenses.
But insure you have parents’ permission if you take children out and also public liability insurance.
You can also claim for ice-creams you buy children too. If the costs come to over £10 you need to have a receipt.
Insurance
Household / contents insurance
Other
If you employ others you may also have the following expenses:
Accountancy fees – if you choose to use one.
Assistants and co-minders wages etc.
Paying your child for help – to tidy up toys, clear up dining tables etc. as long as the hours are reasonable these can be put through as an expense. But school aged children may need work permits so you will need to contact your local authority to apply for one.
Please Note: The percentages are for yearly costs including holidays. The above figures are also for full-time only. For part-time the percentages will vary as follows:
| Hours worked | % of Heating and lighting costs | % of Water, council Tax & Rent |
| 10 | 8% | 2% |
| 15 | 12% | 4% |
| 20 | 17% | 5% |
| 25 | 21% | 6% |
| 30 | 25% | 7% |
| 35 | 29% | 9% |
| 40 (full time) | 33% | 10% |
For clarity refer to the following government document:
https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim52751
Capital Expenses and allowances for large purchases
Capital expenses differ from household expenses because large items often last longer and are subject to depreciation. These are also called ‘plant and machinery’
- A car – this has special conditions, read the following for clarity
https://www.gov.uk/capital-allowances/business-cars
- TV
This can only be claimed if the TV is solely for the purpose of the minded children, in other words business items only not for domestic use.
Additional TV services such as Sky channels etc. up to ½ annual cost
- Some fixtures e.g. fitted kitchens, bathroom suites
- Alterations to a building
- Fire alarm and CCTV systems
- Lifts, escalators
- Water heating system
- Air-conditioning
- Electrical systems
- Hot and cold water systems (but not toilet and kitchen)
When receipts are not required
You do not need receipts if you have paid for items that come to less than £10 in one day.
If you pay £7.50 for entrance tickets to a show, then £7.50 for lunch, this is over the £10 limit for the day and receipts will be needed.
Receipts are therefore not required for items bought in one day that cost less than £10, such as:
- Car parking
- Entrance fees
- Children’s comics
- CD/DVD rentals from library
- Discount stores crafts
- Seeds
- Drinks on outings
- Purchases from: charity shops, car boot sales, Ebay, Amazon
- Etc…
If you’re a sole trader or partner and have an income of £83,000 or less a year, you may be able to use a simpler system called cash basis instead.
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