Do not remove the 10% wear and tear allowance for childminders from April 2026

Retain the 10% wear and tear allowance for childminders, or introduce an equivalent alternative that reflects the additional household costs of providing regulated childcare from home and helps ensure childminding remains financially sustainable.

Childminders provide essential home-based childcare for families, including babies, siblings, children with additional needs, and parents needing flexible or wraparound care. They work from their own homes, so their workplace is also their family home. We believe the 10% wear and tear allowance recognises unavoidable household costs such as utilities, cleaning, equipment use, and general wear. We think removing it risks making childminding financially unsustainable and reducing childcare availability for families.

The Government is aware that childminders are concerned about changes to administrative arrangements from April 2026 in connection with Making Tax Digital (MTD) for Income Tax.

MTD for Income Tax, through digital record-keeping, aims to reduce errors and simplify tax returns. From April 2026, self-employed childminders with qualifying income over £50,000 must use MTD for Income Tax. The Government expects only a small proportion of childminders to use MTD for Income Tax from April 2026.

All childminders currently have the option to use alternative methods for some of their expenses and record-keeping responsibilities. In particular, all childminders can currently deduct 10% of their childminding income to cover wear and tear of furniture and household items, instead of deducting the actual costs of purchasing, repairing and replacing these items.

Childminders using MTD for Income Tax from April 2026 must use normal rules for expenses and record-keeping and so should deduct actual business costs for these items, in the same way as other businesses do. If an item is for both business and personal use the business proportion of the cost can be claimed, using a reasonable estimate if necessary. For example, if a childminder needs to replace kitchen equipment they use for meals for both their own household and the children they look after, and they estimate that 60% of the use relates to childminding, then they can claim 60% of the replacement cost.

The Government recognises childminders’ concerns about this method and so we will actively engage with childminders and stakeholders in the 2026 to 2027 tax year to review the impacts of moving from the 10% deduction to actual costs for wear and tear expense claims.

There are about 30,600 self-employed childminders in the tax system in the UK. About 2,500 of these will be required to use MTD for Income Tax from April 2026. In 2026-27, all other childminders can continue to use the alternative methods including the 10% deduction and are unaffected by these changes.

The 10% deduction only covers wear and tear of furniture and household items, not other costs including utilities, cleaning and non-domestic equipment. The actual business costs of these and any other expenses can be deducted, as well as the 10% deduction if applicable to those not in MTD. This is an important principle that the Government is aware may not have been fully appreciated by some childminders and childminding organisations. Childminders who have not been deducting these costs separately may get more tax relief by doing so, instead of only using the 10% deduction.

For utilities and other household costs, there is an alternative method to allow childminders to claim a proportion of their bills based solely on the number of hours of childcare provided per week. Childminders within MTD for Income Tax can also claim a deduction for a proportion of their bills, using the same rules that apply to all businesses based at home. The amount to claim is based on their own individual circumstances of how much of the property is used, and for how long. This ensures that childminders with exceptionally high household costs can get all the tax relief due to them.

These methods of deducting business costs together allow any childminder to reflect all the costs relating to providing childcare from their own home when calculating the profits of their business.

The Government is committed to supporting those childminders through the transition. HMRC has worked with the software industry to ensure there is free and low-cost software available to support smaller and simpler businesses. It is also taking comprehensive steps to raise awareness by writing to affected taxpayers and agents, engaging widely with industry and tax bodies and launching a marketing campaign through social media and radio.

HMRC has recently published updated guidance on GOV.UK for all childminders, including those entering MTD for Income Tax, and giving full details of the alternative methods for wear and tear, household costs, food and drink and record-keeping. https://www.gov.uk/guidance/claiming-expenses-and-keeping-records-if-youre-a-childminder

The Government engaged with Coram PACEY prior to the announcement of the changes at Budget 2025, as the original agreement in 1986 introducing the alternative methods was made with their predecessor. We will continue to work with Coram PACEY, the Scottish Childminding Association (SCMA), the Northern Ireland Childminding Association (NICMA) and other childminding organisations to help childminders with the transition.

HM Treasury