Allowable expenses for childminders who work from home

Childminders operate from their own residences, providing childcare services to parents who pay for their children's care, typically during the parents' working hours. When calculating taxable profits, HMRC permits deductions from childminding income for reasonable expenses directly related to childminding. Receipts aren't necessary for items under £10 in cost. However, receipts are required if multiple smaller items totaling £10 or more are purchased at once.

Direct expences:

This encompasses all expenses incurred, including purchases made with any grants received. Remember to account for fees associated with participating in activity groups. While these expenses may seem insignificant individually, they can accumulate to a significant sum over the course of the year.

Indirect expenses:

Certain expenses are commonly recognized as contributing to the operational costs of your childminding business. These include portions of your heating and lighting bills, council tax, water rates, and home rental expenses.

How this works is illustrated in the following table:

Hours worked % of Heating and lighting costs % of Water rates, Council Tax and Rent

10 8% 2%

15 12% 4%

20 17% 5%

25 21% 6%

30 25% 7%

35 29% 9%

40 (full time) 33% 10%

Additionally, there's a recognized allowance of 10% of gross income designated for wear and tear on your home.