Providing services and consumables free of charge reduces your overall income. While simpler for parents, this "out-of-pocket" approach becomes unsustainable as children age and government funding rates decrease.
Here is a succinct guide on how to protect your income while staying compliant.
Why charge for “Consumables”?
Government funding is designed to cover childcare and education only. It is not calculated to cover:
Meals and snacks (breakfast, lunch, tea, or healthy snacks).
Essential extras (such as nappies, wipes, sun cream, or barrier cream).
Enrichment (paid outings, soft play entry, or external classes).
If you provide these for free, your actual "take-home" hourly rate is lower than it needs to be. As children age from under 2’s into higher age bands, the LA rate you receive will decrease, making these hidden costs even harder to absorb.
How it works: Chargeable Extras vs. Statutory Duties
You cannot charge “top-up fees” to bridge the gap between your private rate and the LA rate, but you can charge for specific, itemised extras. When you set these fees up in your business settings, they will be fully itemised on the invoice, ensuring you are compliant with the invoice requirements.
Category | What it includes | The Rule |
Consumables | Food, nappies, wipes, sun cream. | Chargeable. Parents can choose to pay or provide their own. |
Additional Activities | Outings, visitors, specialist classes. | Chargeable. Must be optional for the parent. |
Statutory Items | Toys, craft supplies, and cleaning equipment. | Not Chargeable. These must be covered by the hourly rate and are regarded as the cost of running a business. |
2. Staying Compliant: The "Opt-Out" Rule
The government rule for funded places is that charges must be voluntary. You cannot make them a condition of taking up a funded place.
Parents can technically opt out of extras:
Meals: they bring a packed lunch (in line with your healthy eating policy)
Consumables: they supply their own nappies, wipes, and cream
Outings: you offer a free alternative (like the local park), or absorb the cost and claim it as an allowable expense
The reality of running a small setting
Managing opt-outs case by case is hard, and you shouldn't feel like you have to. Every nursery charges for these extras. It's completely normal.
For families where affordability is genuinely a barrier, you have the “allowable expenses” option: You absorb the fee for parents who are unable to pay for consumables, and claim the cost as an allowable expense on your tax return.
3 Steps to Strengthen Sustainability
Most parents are happy to contribute once they understand what they're paying for. Here's how to make it straightforward for everyone.
Analyse your outgoings: Consider exactly how much you spend on food, nappies, etc per child. You might be surprised by the total. Ensure you factor in tiney fee with calculations.
Consider all the costs of providing meals - the ingredients, including oil and butter, breakfast, snack, tea, and hot dinners. Remember to add the costs of your labour and tiney fee. For example, this could tally up to £7.5 per child on a full-time day
Consider the daily costs of nappies, wipes, and sunscreen (based on the child’s age and use). For example, this could tally up to £3 per day per child using nappies.
Activities - cost of the outing + fuel or other transport + your labour of researching and planning the activity + tiney fee
Be Transparent: Update your Fees and Admissions Policy to list these optional charges clearly, and share with existing families and new families when they join your setting.
Use our - Funding: Additional Fees Explainer for childminders- a guide to support your discussions with parents so they understand they are paying for "extras," not for the "funded hours" themselves.
Here’s an example message about an outing: “We’re planning a trip to the local farm as part of our theme on farm animals this term. We need at least [4] families to opt in for the trip to go ahead. Please let me know by [Wednesday] if you’d like to join”.
Use our General Consumables and Additional Charges Policy - A brief guide to share with parents on how and why you will charge consumables fees.
The Bottom Line
Charging for consumables isn't about being expensive; it’s about making sure your business is sustainable. By itemising these costs, you ensure you aren't paying out of your own pocket to provide food, additional services, and resources for the children in your care.