Ka Lai Brightley-Hodges, Head of Coram PACEY comments:

“Following our webinar with HMRC on 11 December, we have worked to clarify the information shared during the webinar and, as a matter of urgency, met with HMRC this week to confirm their position about childminder expenses under Making Tax Digital (MTD) for Income Tax. We regret to confirm that, under MTD, childminders will no longer be able to claim the 10% wear-and-tear allowance. 

Over recent months, we have held multiple discussions with both HMRC and the Department for Education (DfE), during which we consistently emphasised the importance of the long-standing childminder agreement that we developed with HMRC. In particular, we highlighted the critical role of the wear-and-tear allowance, which recognises the unique nature of childminding businesses and the way they operate. 

Despite assurances that childminders would not be disadvantaged by the move to MTD, the removal of the wear-and-tear allowance directly contradicts those assurances. At a time of significant economic pressure, this change could be devastating. Childminders will now only be able to claim relief on specific purchases and expenses, rather than benefiting from a blanket allowance that has long acknowledged the reality of their operating model. This shift assumes childminders have the cashflow to make upfront purchases – an increasingly unrealistic expectation for many. 

We are now engaging with other childminding representative organisations to coordinate a collective response, in which we will be urging the Government in England and Wales to recognise the serious impact this change will have and to reconsider its position. If the Government is truly committed to reversing the decline in childminders, as outlined in the Best Start in Life strategy in England and work linked to the Independent Review of Childminding in Wales, this would be a meaningful and immediate place to start.” 

“The decision to remove the 10% allowance feels profoundly demoralising. Childminders are expected to meet high legislative expectations while often working alone, from their own homes, absorbing the cost of repairs, cleaning, and ongoing improvements in unpaid time. The removal of this allowance sends a clear message that this labour – and the quality it enables for children and families – is not seen, understood, or valued.” – Childminder in Ceredigion, Wales

HMRC’s position

We asked HMRC to clarify their position in writing and they responded as follows: 

“Childminders who are not within MTD are still able to get tax relief on the business proportion of the purchase and replacement of furniture and household items, which is more commonly known as wear and tear, as set out in the agreement.  

Childminders within MTD are still able to get tax relief on the business proportion of the purchase and replacement of furniture and household items, which is more commonly known as wear and tear, by following the standard rules for self-employed Income Tax. This replaces the method set out in the agreement for childminders within MTD from April 2026. 

Updated HMRC guidance will be published by Spring 2026.” 

Please note we have raised the point that HMRC’s reference to “wear and tear” above relates to purchases and expenses and is separate from the blanket 10% deduction of childminding income that childminders are currently able to make under the childminding agreement with HMRC (BIM52751).