You might have heard about something called Making Tax Digital (or MTD). Here's what it actually means for you, and how we're making sure you're already ahead of the game.
What is Making Tax Digital?
Making Tax Digital is a government initiative to modernise the tax system. Instead of submitting one annual tax return, you'll need to keep digital records and send quarterly updates to HMRC.
When does it start?
It's being rolled out in stages:
From April 2026 if you earn over £50,000 in the tax year 2025/2026
From April 2027 if you earn over £30,000 in the tax year 2026/2027
From April 2028 if you earn over £20,000 in the tax year 2027/2028 (this is currently planned, not confirmed)
What does this mean for me?
You'll need to use software to keep digital records of your income and expenses, and submit updates to HMRC four times a year, as well as your final declaration at year end.
Why we're concerned
The biggest change for childminders is the removal of the 10% wear and tear allowance. This flat-rate deduction has been a lifeline for years. It recognised the reality of running a childminding business from your home, without needing to keep receipts for every broken toy or worn-out carpet.
Under MTD, you'll need to claim actual costs instead. For most childminders, this will mean:
More time spent on admin and record-keeping
The need to keep receipts for everything
A higher tax bill if your actual costs don't add up to 10% of your income
We don't think this is fair. Childminders already work incredibly hard, and these changes add burden without recognising the unique nature of home-based childcare.
How you can get involved
tiney is actively campaigning to protect childminders from the worst of these changes.
Here's how you can help:
Sign the petition. There's an active petition on the government website calling for childminders to keep the 10% wear and tear allowance. The more signatures, the louder our voice.
Complete the survey. We're gathering evidence on how these changes will impact childminders.
Tell us how we can help. We're collecting feedback on how we can help you manage these changes.
Talk to your MP. A personal letter or email to your local MP can have a big impact. Coram PACEY have created a template you can use here.
We'll keep you updated on the campaign and let you know when there are new ways to get involved.
What's changing and how to minimise the impact
Here's what we know so far, and what you can do to protect your business.
Wear and tear: claim everything you can
You're losing the simple 10% allowance. But you can still claim the actual costs of purchasing, repairing, and replacing items used for your business.
The key is to keep records of everything and proportion costs fairly.
What you can claim:
Furniture, equipment, and household items used in your setting
Repairs and replacements (cleaning a damaged sofa, replacing a broken highchair)
A proportion of items used for both childminding and personal use
How to work out proportions:
HMRC accepts different methods. The key is to be reasonable and consistent.
By days of the week: If you work 5 days a week, that's 5 ÷ 7 = 71%.
By rooms in your home: If you use 3 out of 6 rooms for childminding, that's 50%.
By usage: If your sofa is used for childminding 40% of the time, claim 40%.
You can also combine these calculations. For example
50% (three out of 6 rooms in the house used for childminding) x 71% (working 5/7 days) = 36% claimed for your business.
You need to make a judgement on what you think is a reasonable way to calculate the use for your business. HMRC won't see every calculation. They just want a plausible, rational explanation if they ever ask.
Household bills: one area where you might do better
Here's one bit of better news. The way you calculate household bills is changing, and for many childminders, this could mean claiming more.
Old method (based on hours worked): Working 35 hours a week, you could claim 29% of heating and lighting, and 9% of water rates, council tax, and rent. On a £1,000 heating bill, that's £290 tax exempt.
New method (based on days worked): If you work 5 days out of 7, that's 71%. On the same £1,000 heating bill, you could now claim £714.
It won't make up for losing the 10% wear and tear, but it's worth making sure you're claiming the full amount.
Keep receipts for everything
Under MTD, you'll need digital records of all your expenses. This includes things that would previously have been under £10.
Get into the habit now:
Photograph receipts as soon as you get them
Use the tiney app's AI receipt scanner to log expenses quickly
Keep records for at least five years after the tax year
What if you don't have a receipt?
It happens. The parking machine didn't print one. The market stall didn't offer one.
HMRC doesn't have a rule allowing expenses without receipts. But they accept it happens occasionally. If you don't have a receipt:
Make a note straight away: what you bought, how much, where, when, and why it was for childminding
Keep any other evidence: bank statements, order confirmations, screenshots
Be reasonable: a handful of small missing receipts is understandable, but HMRC may disallow expenses without adequate proof
A bank statement shows you made a payment, but doesn't prove what it was for. Your notes matter.
Claim everything you're entitled to
HMRC says many childminders don't claim for everything they could. Think about:
Kitchen utensils and equipment
Garden and patio maintenance (if it's part of your setting)
Cleaning materials
Subscriptions used in your setting (proportioned)
Broadband (proportioned)
Travel costs for childminding activities
Training and courses
The cost of hiring a village hall or soft play
If it's genuinely for your childminding business, you can likely claim it. When in doubt, call the Morton Michel Tax Advice line.
Here's how we're supporting you
We know this is a lot. We're working hard to make it as easy as possible.
What you can do now:
Record expenses in the tiney app. Every expense you log is a digital record. Use the AI receipt scanner to make it quick.
Your income is sorted. Any income invoiced through tiney will be provided as part of your tax return. No chasing paperwork.
What we're building:
Quarterly exports so you can submit your returns with ease
Direct HMRC submission so we can send your data to HMRC on your behalf
Proportion calculators to help you work out the right percentage to claim
Compatibility with accounting software so everything slots together
We're building this for you. If there's something else that would help, tell us.
What do I need to do right now?
Start logging expenses in the tiney app.
Keep every receipt. Photograph them straight away.
Add your voice to the campaign. Sign the petition and complete the survey.
Don't panic. We'll keep you updated and make sure you have everything you need.
Useful links
Need more help?
Your tiney membership includes access to the Morton Michel Tax Advice line. Call them on 0330 058 9861 if you have questions about your specific situation.
You can also get 20% off self-assessments with Taxfix at taxfix.com/en-uk/tiney.