Childminder Expenses: the 10% Wear and Tear Deduction and What MTD Changes

Two different sets of rules govern what a registered childminder claims for working from home, and you are in one or the other depending on a date and a turnover figure. If you are not yet using Making Tax Digital for Income Tax (MTD for Income Tax), HMRC's long-standing agreed simplifications apply: a flat 10% wear and tear deduction and an hours-based split of your household bills. Once MTD for Income Tax catches you, those agreed percentages stop and you claim the actual business proportion instead. Everything below answers twice, once for each side of that fork.

Which side of the Making Tax Digital fork are you on?

MTD for Income Tax phases in by qualifying income, which for a childminder means gross self-employment income plus any gross property income, before expenses:

• 6 April 2026 for qualifying income above £50,000, tested on the 2024/25 tax return.
• 6 April 2027 for qualifying income above £30,000, tested on the 2025/26 return.
• 6 April 2028 for qualifying income above £20,000, tested on the 2026/27 return.

The test is on gross income, not profit, so a childminder billing £26,000 of fees and spending £9,000 running the setting is measured on the £26,000. A full tax year passes between the return that triggers you and your start date, which means the figures you are recording right now decide your 2028 position.

Until your start date arrives you file an ordinary Self Assessment return and use the agreed percentages. From your start date you keep digital records, send quarterly updates and finalise the year, and the agreed percentages are no longer available to you. Our explainer on MTD for Income Tax for self-employment and rental income covers the mechanics of joining, and what the record-keeping actually looks like is set out separately.

What is the 10% wear and tear deduction, and does it survive MTD?

Outside MTD for Income Tax. You can deduct 10% of your income from caring for children in your own home for wear and tear on household items and furniture. It covers the sofa the children sit on, the carpet they wear out, the curtains, the beds used for naps and the kitchen equipment that takes a heavier beating than it would in a family home. You do not keep receipts for it and you do not itemise it. The 10% is applied only to home-based childminding income: fees for work you do at a parent's house, or income from something other than childminding, are not in the base.

Inside MTD for Income Tax. The 10% figure is gone. HMRC's childminder guidance, last updated 18 March 2026, states plainly that you can still claim tax relief on all your business expenses when you use MTD for Income Tax, which means you claim the actual cost of buying, repairing and replacing household items, restricted to the business proportion, and you keep the evidence for it. That is a different exercise, not a smaller entitlement, and for some childminders it is worth more than the 10% was. For most it is worth less, which is the point of running both numbers before your start date arrives.

How do you split your household bills between the business and the family?

Outside MTD for Income Tax, HMRC's agreed method uses the hours you childmind, and it treats two categories differently.

Running costs are the bills that rise when you have children in the house: heating, lighting, water, and the food and drink you buy for the children. Fixed costs are the ones that do not move with usage: council tax and rent.

Childminding hours a week	Running costs claimable	Fixed costs claimable
40 or more	33%	10%
Fewer than 40	(hours ÷ 40) × 33, rounded up	hours ÷ 4, rounded up

Worked at 36 hours a week: running costs are 36 ÷ 40 = 0.9, times 33 = 29.7, rounded up to 30%. Fixed costs are 36 ÷ 4 = 9%. At 25 hours a week it is 25 ÷ 40 = 0.625, times 33 = 20.625, rounded up to 21%, and 25 ÷ 4 = 6.25, rounded up to 7%.

Inside MTD for Income Tax, none of those percentages apply. You work out the genuine business proportion of each household cost on a method you can defend and evidence: rooms used for childminding as a share of the rooms in the home, multiplied by the share of the time those rooms are in business use, is the usual approach for heat, light, water, council tax and rent. Costs incurred wholly for the children, such as their food and drink bought separately, come in at 100% because there is nothing private about them.

What does the difference look like on real numbers?

Colette childminds from her home in Shrewsbury for 36 hours a week. Her figures for 2026/27:

• Gross childminding income: £24,000, all of it home-based.
• Household running costs for the year: £3,600, of which £1,500 is food and drink bought for the children and £2,100 is gas, electricity and water.
• Household fixed costs: £9,000 of council tax and rent.
• Household items replaced during the year: a sofa at £600 and a washing machine at £400, £1,000 in total.
• Two of the six rooms in the house are used for childminding, for 36 of the 105 waking hours in a week.

Her gross income of £24,000 sits below the £30,000 threshold and above £20,000, so her 2026/27 return puts her into MTD for Income Tax from 6 April 2028. For 2026/27 itself she is outside it. Both computations are set out so she can see what is coming.

Route one, outside MTD for Income Tax, using the agreed percentages:

• Running costs: £3,600 × 30% = £1,080
• Fixed costs: £9,000 × 9% = £810
• Wear and tear: £24,000 × 10% = £2,400
• Total claim: £1,080 + £810 + £2,400 = £4,290

Route two, inside MTD for Income Tax, using the actual business proportion:

• Business proportion of shared household costs: (2 ÷ 6) × (36 ÷ 105) = 0.3333 × 0.3429 = 0.1143, so 11%.
• Food and drink bought for the children, wholly for the business: £1,500 in full.
• Gas, electricity and water: £2,100 × 11% = £231
• Council tax and rent: £9,000 × 11% = £990
• Sofa and washing machine: £1,000 × 11% = £110
• Total claim: £1,500 + £231 + £990 + £110 = £2,831

The agreed percentages give Colette £1,459 more of deduction than the actual-proportion computation on the same year (£4,290 less £2,831). She is a basic-rate taxpayer paying Class 4 National Insurance at 6% on profits between £12,570 and £50,270 (a 2025/26 figure), so the combined rate on that slice of profit is 26%. The difference is worth £1,459 × 26% = £379 of tax and National Insurance in the year.

Redo it with your own numbers and the answer can flip. A childminder in a small flat with a large food bill and a recently replaced kitchen can come out ahead on actual costs, particularly where a room is used for childminding almost all day. The one thing you should not do is assume the switch is neutral.

What can you claim outright, whichever regime you are in?

These are ordinary business costs and neither the agreed percentages nor MTD for Income Tax changes them. They are deductible in full where they are incurred wholly for the childminding business:

• Registration and inspection fees paid to Ofsted in England, Care Inspectorate Wales, the Care Inspectorate in Scotland or the local Health and Social Care Trust in Northern Ireland.
• Disclosure and Barring Service (DBS) checks for you and for anyone in the household who needs one.
• Paediatric first aid, safeguarding and continuing professional development courses.
• Public liability insurance and car business-use cover.
• Membership of a professional body such as the Professional Association for Childcare and Early Years (PACEY).
• Toys, books, craft materials, nappies, wipes, safety gates and outings with the children.
• Stationery, printing, a share of your phone and broadband, and the bank or accountancy costs of the business.

The distinction that catches people is between the family's things and the setting's things. A stair gate bought because you childmind is a business cost. A stair gate you would have bought anyway for your own toddler is not, and outside MTD for Income Tax it sits inside the wear and tear deduction rather than being claimed separately.

How do toys and equipment differ from things that last?

Small items with a short life, such as craft supplies, puzzles, books and consumables, are ordinary running costs and come off your profit in the year you buy them. Larger items you expect to use for years, such as a double buggy, a set of cots, a garden playhouse or a laptop used for the business, are capital and get relief through capital allowances instead.

For 2026/27 the Annual Investment Allowance gives 100% relief on up to £1,000,000 of qualifying plant and machinery in a 12-month period, which covers everything a home childminding setting is ever likely to buy. Where an item is not fully relieved, the main-rate writing-down allowance is 14% from 6 April 2026 for income tax, reduced from 18%, and there is a 40% first-year allowance for new and unused main-rate plant and machinery bought on or after 1 January 2026. Anything used partly privately is restricted to the business proportion. The sole trader capital allowances page works through the mechanics.

The regime fork does not change any of this. It changes only how the household items covered by the wear and tear deduction are handled: outside MTD for Income Tax the 10% absorbs them, inside it you claim the business share of what you actually spent.

What mileage can you claim, and can you change your mind later?

School runs, nursery drop-offs, trips to the library, the park and the shops for the setting's supplies are business miles. Driving your own children about is not.

The Approved Mileage Allowance Payment rates for cars and vans are 55p a mile for the first 10,000 business miles in the tax year and 25p a mile thereafter, from 6 April 2026. The first-10,000 rate was 45p for 2011/12 through to 2025/26, so a 2025/26 return and a 2026/27 return use different rates. Motorcycles are 24p.

The alternative is claiming the actual running costs of the vehicle (fuel, insurance, servicing, road tax) restricted to the business proportion, with capital allowances on the vehicle itself. The choice is made per vehicle and it sticks: once you have claimed mileage rates for a car, you cannot switch that car to actual costs and capital allowances later, and you cannot use mileage rates for a vehicle on which you have already claimed capital allowances. A new car resets the decision. This rule is unaffected by which side of the MTD fork you are on.

Whichever method you pick, keep a mileage log with the date, the destination and the reason. At 4,000 business miles a year the 2026/27 claim is 4,000 × 55p = £2,200, which is worth £572 in tax and Class 4 National Insurance to a basic-rate childminder at the combined 26% rate.

What records do you need, on either side of the fork?

Outside MTD for Income Tax, the agreed percentages remove some of the burden but not all of it. You still need your childminding income figure (the 10% and the trading-profit computation both depend on it), your total household running and fixed costs for the year, and an honest record of the hours you childmind each week. Receipts for the household bills matter, because the percentage is applied to a real number.

Inside MTD for Income Tax, you keep digital records of income and expenses using compatible software, send a quarterly update for each source of income and then finalise the year. Because the household claim is now the actual proportion, you need the working behind that proportion written down and kept: which rooms, how many hours, and the bills themselves. Start building that evidence before your start date rather than in the first quarter after it.

What if your childminding income is under £1,000?

If your gross income from all self-employment in a tax year is £1,000 or less, the trading allowance covers it and you may not need to file at all. Above £1,000 you register for Self Assessment by the 5 October following the end of that tax year, and you deduct either the £1,000 allowance or your actual expenses, never both. For a childminder with a real household claim, actual expenses almost always win, so the allowance is mostly relevant to someone minding one child a few hours a week.

Above the allowance you pay income tax at your marginal rate on the profit, with a personal allowance of £12,570 and a basic-rate band to £50,270 (2025/26 figures, still current when this page was checked in August 2026), plus Class 4 National Insurance at 6% between those two figures and 2% above. Class 2 National Insurance stopped being payable from 6 April 2024 for anyone with profits at or above the small profits threshold, and you keep your State Pension entitlement without it.

Choosing a bookkeeping routine, registering with your inspectorate and deciding whether to bring in an accountant at all are separate questions, covered on our page for childminders.