Coram PACEY statement: Making Tax Digital

We understand the concerns and confusion among childminders following last night’s Coram PACEY webinar with HMRC. The session was intended to provide clarity on the transition to Making Tax Digital (MTD) for Income Tax and its implications for the way in which childminders submit business expenses.

We have held multiple discussions with both HMRC and the Department for Education (DfE) over recent months, during which we explicitly reinforced the importance and significance of the childminding agreement we developed with HMRC and the impact any changes would have on childminders – particularly around wear-and-tear, which is uniquely significant to how childminding businesses operate.

“I was briefed this week by the policy team, who manage the agreement with childminders. In the budget statement, it was said that the agreement will no longer apply to those who are coming into Making Tax Digital. If you’re not coming into Making Tax Digital, then the agreement will continue. The wear and tear allowance will not be applicable in Making Tax Digital.” Lenny Barry (HMRC)

HMRC further confirmed during the webinar that other allowable expenses, such as household expenditure, will continue under reasonable apportionment. For example, this means that if you that if you currently claim 25% of your heating and lighting costs because you work 30 hours a week, this can continue. The change will be for those using MTD from April 2026.

Coram PACEY was surprised and disappointed to learn in the course of yesterday’s webinar with HMRC that the transition to Making Tax Digital for Income Tax will potentially disadvantage childminders, having been assured during previous discussions that childminders would not be disadvantaged by the change.

We share the concerns and confusion among childminders given the session was intended to provide clarity on the transition to MTD. The fact that this information was shared verbally in last night’s webinar with a lack of official communication and published guidance from HMRC only adds to the confusion and worry felt by childminders.

At a time when the number of childminders is already in decline, this policy risks pushing even more people out of the profession. With increasing economic pressures already weighing heavily on childminders, this could be devastating. We want to reassure members and the wider childminding sector that we have spoken to DfE today about this update to the policy, and have also requested urgent clarification from HMRC. We will continue to argue for the need to uphold the existing support for childminders with expenses that are directly attributed to childminding.