Welcome to our tax guide for self employed childminders
Are you a self employed childminder looking for help with your accounts and personal tax returns?
About the Author
Sarah Blundell is a Fellow of the Association of Chartered and Certified Accountants (ACCA) and has more than 20 years of experience in the accounting field. As the founder of her own practice, she focuses on delivering outstanding fully digital services tailored for small businesses.
Sarah is a fully qualified chartered accountant with the ACCA. The Association of Chartered Certified Accountants is a global body for professional accountants that commits to acting in and upholding the public interest. This means you can be assured of our professional conduct and that your best interests are part of our core values.
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In this article we discuss:
- Introduction
- When Do I Need to Tell HMRC I Am Self Employed?
- How Do I Register as Self Employed With HMRC?
- What If I Have Made A Financial Loss?
- When Do I Need to File A Self Assessment Tax Return and Pay Tax?
- What Income Do I Pay Income Tax And National Insurance On?
- What Allowable Expenses Can I Claim On My Tax Return When I’m A Self Employed Childminder?
- What Self Employment Expenses CAN’T I claim On My Tax Return?
- Can Making Pension Contributions Save Me Tax?
- How Do I Pay Any Tax Liability Due?
- What Are the Tax Thresholds and Rates for Self Employed?
- What Records Do I Need to Keep?
- How Can I Keep My Accounts & Business Finances Organised?
- Meeting Key Deadlines
- Do I Need to be VAT Registered?
- Should I Set Up A Limited Company?
- What About Making Tax Digital (MTD)?
- Further Information
This tax guide aims to give childminders in the UK a better understanding of the tax requirements side of their business, which many childminders may find a daunting task.
This guide is for both childminder sole traders looking after children, and also limited companies. Any childminder limited company guidance will be shown in blue text. Different rules apply for tax purposes under certain circumstances.
Any earnings you make from your childminding services are not taxed at source. You must work out how much income tax you owe, then report the taxable income and pay the tax due to HMRC each year.
We cover when you need to tell HMRC you are a self employed person, how to become registered as self employed, claiming expenses, reporting earnings, when and how to pay your income tax and National Insurance, key dates, and completing your annual tax return and accounts.
Working for yourself looking after children has so many benefits. You decide the rules, who you want to work for and when. Taxes can be a factor that put many people off.
Simple Taxes experienced team are here to change that. Specialising in UK taxes, accounts and self assessment tax returns for the self employed, let your personal accountant worry about the tax requirements side of your business for you. We constantly research changes in tax legislation to be able to offer our clients essential assistance, general guidance and advice and keep you tax efficient and ensure compliance.
While using a professional accountant isn’t a legal requirement, it can be extremely beneficial. With a keen eye for spotting allowable expenses, they will ensure you remain compliant with HMRC and Companies House legislation when it comes to your tax affairs. They should also be able to save you tax when completing your tax calculation, saving you money in the long run, ensuring everything is correctly calculated.
How Do I Register as Self Employed With HMRC?
You can notify HMRC of your new business self employment status by registering for self assessment online through the HMRC website. Or Simple Taxes can do this for you.
When you register, you will need to provide HMRC with various personal information such as your name, address, date of birth, national insurance number, etc.
Once HMRC have processed your registration, you will receive your unique taxpayer reference number in the post. You will need this unique taxpayer reference number to file your personal self assessment return.
When Do I Need to Tell HMRC I Am Self Employed?
When your gross childminding income (before expenses are deducted) goes over the £1,000 trading allowance in a tax year (6th April to 5th April), you will need to inform HMRC of your self employment status and complete a self assessment tax return to report your earnings.
If you setup a limited company and become a company director, you should register for self assessment. This is because any money you withdraw from your company will need to be declared as income on your self assessment tax return.
Once the tax year ends on 5th April that you exceed £1,000, you will need to inform HMRC and ensure you are registered as self employed by 5th October.
What If I Have Made A Financial Loss?
If you make a loss in the tax year, due to your allowable expenses paid exceeding your income received, you will have no income tax bill, but you must still declare your self employment figures to HMRC. The loss can be carried forward and offset against future self employment profits. Alternatively, if you have employment income, the self employment loss can be set off sideways against your employment income, which may result in a tax rebate.
Limited company losses can also be carried forward against future profits, or carried back one year to receive a rebate if you originally paid corporation tax in the previous year.
When Do I Need to File A Self Assessment Tax Return and Pay Tax?
The UK tax year ends on 5th April each year. You then have until 31st January the following tax year to file your tax return and pay any tax due on any profit after allowable expenses are deducted.
If your tax liability exceeds £1,000 you will be required by HM Revenue & Customs to make payments on account towards the following tax year. The exact amount of payments on account are due on 31st January and 31st July in the UK.
Failure to file your tax return and pay tax even one day after the 31st January deadline, you will incur tax penalties. It is therefore important to be aware of the key dates above.
What Income Do I Pay Income Tax and National Insurance On?
You will pay tax and National Insurance on your calculated self employed childminding profits. This is your total income in the tax year, less any expenses you claim.
If you have additional income sources such as PAYE income from employment, rental income, foreign income, savings interest, capital gains, investment income, any other income, etc, you will need to include these on your self assessment tax return too.
Limited company directors pay tax on the money they withdraw from their company.
What Allowable Expenses Can I Claim On My Tax Return When I'm A Self Employed Childminder?
When calculating your own tax from self employment for the year, one of the benefits of being self employed is that you can claim allowable expenditure as a deduction against your income, to arrive at your taxable profit figure.
As a childminder claiming all of your business expenses you can create some significant tax savings. The expense must be incurred wholly and exclusively for business purposes in your childminding profession.
Below is a comprehensive list of essential allowable business expenses most childminders can claim as tax deductions against their earnings in their childminding tax returns. You can deduct the below tax deductible expenses from your self employed income when used solely for business purposes:
👩💼 Accountancy fees: for example Simple Taxes
📣 Advertising and marketing: such as website, web hosting, cards and flyers, images, etc
💸 Bad Debts – Unpaid invoices or fees you can’t recover
🏦 Bank Fees – Charges, interest, and payment processing costs
📊 Bookkeeping software: for example QuickBooks (<—– use this link for 90% off for 7 months)
🛡️ Business insurance: for liability cover e.g. PolicyBee
🧽 Cleaning Supplies – Detergents, wipes, hand sanitiser, etc
💻 Computer Software – e.g. Microsoft Office, planning apps
🧑🤝🧑 Employees – Wages for assistants or support staff
🛠️ Equipment & Tools – iPads, buggies, gates, high chairs, cots, etc
🥪 Food & Drink – Reasonable estimate allowed, no receipts needed
🏡 Household expenses: % of house bills — click here for further HMRC guidance
👩 Influencer Marketing: for example Social Cat
⚖️ Legal and professional fees: such as agent fees, security, PACEY fees, etc
🎨 Materials & Stock – Toys, books, crafts, nappies, outings, snacks. etc
📱 Mobile Phone – % used for calls, texts, apps for work
🚗 Motor Costs – Business use of car or mileage claim
📰 Professional subscriptions: such as the National Childminding Association
🏢 Registered office address: to protect your home address privacy, e.g. 1st Formations
🏠 Rent & Rates – If you rent a premises or pay extra for space used
✉️ Stationery & Postage – Pens, paper, ink, forms, stamps
📚 Training – CPD, safeguarding, paediatric first aid, EYFS
🧳 Travel & Subsistence – To clients, training events, or work trips
👕 Uniform – Branded clothing used solely for work
🛋️ Wear & Tear – 10% of income if using your home regularly for minding
Please be aware, some of the above expenses come with their own set of rules. We offer a comprehensive Expenses Guide & Checklist for both sole traders and Limited Companies.
What Self Employed Expenses CAN’T I Claim On My Tax Return?
Below are some examples of costs actors may incur that CAN’T be claimed as an expense:
- Any items used for personal
- Business trips that are extended to personal trips
- Childcare costs
- Client entertaining
- Fines e.g.: parking, speeding, unpaid tolls
- Food/meals unless working away from home
- Gym memberships
- Journey from home to usual workplace
- Late payment and filing penalties from HMRC
- Life insurance payments, unless ‘relevant life’ policy
- Uniform which can be seen as dual purpose
- Wages, tax and NI for yourself when trading as a sole trader
Can Making Pension Contributions Save Me Tax?
You might be curious about whether your private pension contributions can help you save on taxes. The good news is that they can, depending on your situation.
For sole traders, while pension contributions aren’t considered a business expense, they can still be advantageous when filing your self-assessment tax return if your earnings exceed £50,000. Your basic rate tax band can be increased by the amount you contribute to your pension.
If you operate a limited company, paying your pension contributions directly from the company into your pension fund is a very tax-efficient strategy. These contributions qualify as allowable expenses, which means you can benefit from corporation tax relief.
Online pension providers like Pension Bee offer a fantastic user-friendly platform to help you start building your pension savings.
How Do I Pay Any Tax Liability Due?
You can pay any tax you owe from your childminding income using your online HMRC account, after filing your tax return.
If you don’t have an online login you can set one up here.
Alternatively, you can see here the other methods of paying your self assessment tax bill to HMRC:
- Credit or debit card
- Direct Debit
- Online or telephone transfer
- Cheque through the post
- Through your tax code (must owe less than £3k and file return online by 30th December)
- At your bank or building society
What Are the Tax Thresholds and Rates for Self Employed?
When you’re self-employed, your tax isn’t one flat rate — it’s made up of a few different layers depending on how much profit you make.
Instead of listing figures here, it’s much easier (and more accurate, as rates can change) to refer directly to HMRC’s official pages:
- Income Tax rates: https://www.gov.uk/income-tax-rates
- National Insurance (self-employed): https://www.gov.uk/self-employed-national-insurance-rates
- Dividend tax rates (if you also take income from a limited company): https://www.gov.uk/tax-on-dividends
In simple terms, your tax is usually made up of:
- Income Tax on your profits
- National Insurance contributions
- Possibly dividend tax if you operate through a limited company
If you’re unsure how this applies to you, it’s always worth finding out, so you’re not caught off guard later in the year.
What Records Do I Need to Keep?
When you are a self employed childminder, you are legally required to keep all of your records (bank statements, sales invoices, purchase and expenses invoices), for 6 years plus the current tax year.
This is in case HMRC ever ask you for proof of your figures. They can issue penalties if the required documents not available. Therefore good record keeping is so important.
A unique rule for childminders – receipts are not required for purchases under £10.00.
How Can I Keep My Accounts & Business Finances Organised?
Here are a few tips for keeping accurate records and keeping on top of your self employed accounts and money, which will in turn help you complete your tax returns at the end of the tax year:
- Open a seperate business bank account – this ensures an accurate record all of your business money (income and expenditure) are in one place, separate to your personal income, making completing your year end tax return 100x easier. A bank account is a legal requirement if you are trading as a limited company. Online banks such as Monzo offer low fees and a quick setup.
- Use accounting software such as Quickbooks – keep on top of your bookkeeping and what you spend, so you can see how your business is performing. Need help with bookkeeping and setting up Quickbooks? Simple Taxes can help.
- Keep all your childminding expenses receipts and bank statements in one place – either by cloud storage like Google Drive, Quickbooks, or filing in a box.
Meeting Key Deadlines
As a self-employed childminder, staying on top of key dates and deadlines is crucial to avoid complications with your tax and National Insurance contributions. Here are some important dates and tips to keep in mind:
- Self-Assessment Deadline: The deadline for submitting your self-assessment tax return is 31 January following the end of the tax year. Make sure to file your return and pay any tax liability due on your profit by this deadline to avoid penalties.
- Self-Assessment Payment on Account Deadline: If you expect to owe more than £1,000 in tax, you’ll need to make payments on account towards your tax liability. These payments are due on 31 January and 31 July each year.
- Limited company accounts filing deadline: 9 months after your year end. The exact date can be found by searching your company name on the Companies House website.
- Limited company confirmation statement deadline: 12 months after your date of incorporation. The exact date can be found by searching your company name on the Companies House website.
- Limited company monthly director payroll deadline: The 19th of each month. A director payroll for the optimum amount will ensure limited company directors get their annual qualifying year towards their state pension.
By meeting these key dates and deadlines and keeping accurate records, you can ensure you’re staying on top of your tax and National Insurance contributions and filing obligations as a self-employed childminder.
Do I Need to be VAT Registered?
If your total childminding earnings before expenses surpass the VAT threshold within a year, you’ll need to register for VAT. Currently, this threshold is set at £90,000.
You can easily register online via your Government Gateway account on the HMRC website. For more details, you can visit the HMRC site HERE.
Should I Set Up A Limited Company?
If you are currently trading as a sole trader, as your sole proprietorship expands, switching to a Ltd Co might be a smart move. This change can provide several advantages, including limited liability that protects your personal assets from business obligations, enhanced tax efficiency through improved planning strategies, a more professional image that can attract customers and suppliers, and greater ease in securing funding.
However, it also brings some drawbacks, for example, increased administrative responsibilities, potentially higher accounting fees, and reduced privacy since your information will be accessible on Companies House. It’s wise to consult an accountant for assistance if you have any questions.
What About Making Tax Digital (MTD)?
Making Tax Digital (MTD) is HMRC’s move towards a fully digital tax system. Instead of doing everything through one big Self Assessment tax return at the end of the year, self-employed people will gradually move to keeping digital records and sending updates to HMRC using approved software throughout the year.
This doesn’t happen all at once — it’s being introduced in stages. From April 2026, it will apply to sole traders with income (before expenses) over £50k, and more people will be brought in over the following years.
What this means for you in real terms is:
- You’ll need to keep your bookkeeping up to date in software
- You’ll submit updates to HMRC during the year, rather than just once annually
- You’ll need MTD-compatible software like QuickBooks to stay compliant – see our discount link at the top of this blog for an introductory 90% off.
👉 You can read more about Making Tax Digital directly on the HMRC website here:
https://www.gov.uk/government/publications/making-tax-digital
Further Information
For further information on self employment, please read the HMRC guidance here.
If you are unsure how much tax you need to pay, need help with your taxes, tax relief and tax return get in touch with our expert team today for assistance with a variety if services at www.simpletaxes.co.uk. We specialise in online tax returns for small businesses and we would love to hear from you!
Send your details to Simple Taxes today, for a fast reply within 24 hours from your own dedicated accountant.
Disclaimer
The information contained in this blog is for general information purposes only, and not for accounting and tax advice. You should speak to a qualified professional about your specific circumstances before acting upon any of the information in this blog.
We are happy to be affiliates for several of the suppliers mentioned in this blog and across our website. This means that if you decide to make a purchase after clicking one of our links, we might earn a commission at no additional cost to you. We suggest these suppliers because we believe they offer valuable products and services, not just because of the small commissions we could earn.
Last Updated: April 2026
