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Childminders' tax information

If you are a childminder, we consider you to be self-employed and you must declare your income to the Taxes Office.​

The following information outlines the expenses which can be claimed against gross fees received and the records to be kept.

Expenses directly related to childminder's activities

Any expenses directly related to earning the childminder fees are allowable for tax purposes. The type of expenditure allowable may include food and drink, stationery, toys and books, the cost of outings etc.

Heat and light

Full time childminders, who care for children in their own home for 40 hours a week or more, can claim a deduction of one-third of household fuel bills. Part-time childminders can claim a scaled down proportion, ie a childminder who works for 20 hours per week can claim one-sixth of household fuel bills.

Rent and rates

Full time childminders can claim a deduction of one-tenth of rent and rates paid. Part-time childminders can claim a scaled down proportion.

Motor expenses

If a motor vehicle is used for picking up children, eg trips to the zoo, the petrol expenditure on such trips can be claimed as an expense. In addition, capital allowances - restricted to the business use of the vehicle - can be claimed on the cost of the vehicle by applying the following proportion:-

  • mileage of the vehicle used exclusively for childminder activities divided by the total mileage of the vehicle throughout the year

As an alternative to these expenses, a deduction of 60p per business mile may be claimed. This flat rate claim includes both running expenses and capital allowances.

Capital expenditure

Relief for capital items purchased solely for childminder activities (eg, playpens and cots) can be claimed in one of two ways:-

1. Capital Allowances can be claimed from the year in which the items are purchased (this includes the commencement year). Capital Allowances effectively give relief on capital expenditure at 25% per annum on the ‘written down value’ of the items.

Example
Playpen purchased for:     £400
  Year 1* Allowance 25% £100
    Written Down Value c/f £300
  Year 2 Allowance 25% £75
    Written Down Value c/f £225
  Year 3 etc.    

*If year 1 is at the start of the business then the allowance will be restricted by reference to the number of months in the first year of assessment that the business has been operating.

Note: The childminder will not normally be expected to do the calculation. If details of the capital items purchased and their cost are submitted with the income and expenditure statement then the relief will be calculated by the taxes office. Should any of the items on which capital allowances have been claimed be sold then details of these items and their sale price should also be advised.

2. Replacement allowances can be claimed if an item of equipment is replaced provided that capital allowance have not previously been claimed on that item.

In this case a claim cannot be made for the cost of the items at the outset of the business or for any new (non replacement) piece of equipment purchased at any time. The claim can only be made when an item is replaced. Relief will be given for the whole replacement cost in the one year of assessment.

Wear and tear of household furnishings

Childminders can claim one-tenth of their gross fees to cover "wear and tear" of household items not used exclusively for childminding activities. No capital allowances or other deductions can be claimed for those items.

Example
Income: Fees for 3 full time children   £36,000
Expenses: Food & drink £2,000  
  Toys & books £1,000  
  Outings £950  
  Stationery £50  
  Business licence (if applicable) £300  
  Heat & light (1/3) £1,000  
  Rent & rates (1/10) £1,250  
  Motor expenses (55p per business mile) £1,000  
  Wear & tear (1/10 of income); £3,600 £11,150
Net profit:     £24,850

(All the figures shown are for illustrative purposes only and are not indicative of the amounts to be claimed – which must be in accordance with the childminders own records)

Keeping records

Weekly income and expenditure records should be kept in order that an annual income and expenditure account can be prepared and forwarded to the taxes office together with the income tax return. Receipts for the expenses directly related to earning the childminding fees will not normally be required to be produced to the taxes office.

They should be kept, however, until the profits for a particular year are agreed by this office. The cost and date of items on which capital allowances are claimed must accompany the income and expenditure account.

Childcare relief

Child care relief was introduced to help those who have to pay for their children to be looked after while they go out to work. Childminders are required to supply a certificate annually to the claimant, as provided by the taxes office, showing how much was paid for the child's care.

Download child care tax relief certificate (size 26kb)

The tax relief is only given if the childminder (playgroup, nursery etc) is registered with the education department.​​​​​​

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