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Written question asked by Mike Martin (Liberal Democrat) on Tuesday, 3 February 2026, in the House of Commons. It was due for an answer on Thursday, 5 February 2026. It was answered by Olivia Bailey (Labour) on Wednesday, 4 March 2026 on behalf of the Department for Education.

Childminding: Taxation

Question

To ask the Secretary of State for Education, what assessment her Department has made of the potential impact of introducing Making Tax Digital at the same time as removing the wear and tear allowance on childminders.

Answer

The department is taking a range of measures to support the financial sustainability of childminding businesses and other early years providers. From April 2026, local authorities will be required to pass at least 97% of their funding directly to providers.

In addition, the expansion of the early years entitlements is set to benefit childminders. The national average three and four-year-old hourly funding rate for local authorities is increasing by 4.1%, the two-year-old hourly funding rate is increasing by 3.3%, and the nine months to two-year-old hourly funding rate is increasing by 3.4%. Childminders may also benefit from the expected increase in demand for places.

Making Tax Digital standardises the way that sole traders record and claim business expenses. It could benefit childminders as it means that any business expenses related to childminding will be included in their tax calculations. We are however aware of the strength of feeling amongst childminders and those who work with them. The department has been talking regularly to Coram Pacey, HMRC and others to understand the issue, the effect that it is having on the childminding sector and to make sure that the concerns of childminders are clearly understood. The department emphasises its strong support for childminders, who continue to provide high quality and flexible early education, and do so in a way that families across the country greatly value.

Secondary information

Type
Written question
Reference
110584
Session
2024-26
Subjects
Childminding Digital technology Taxation
Link
View this Written question on www.parliament.uk