How to Start a Childminding Business in the UK

Childminding is a rewarding way to earn a living while working from home. It is one of the few businesses where registration is mandatory before you can start — and the process takes time. This guide walks you through everything from Ofsted requirements to tax and bookkeeping.

Ofsted Registration

In England, you must register with Ofsted before you can look after children under eight for more than two hours a day in your own home. In Wales, you register with Care Inspectorate Wales (CIW). In Scotland, it is the Care Inspectorate.

The Ofsted registration process involves:

• Enhanced DBS check — for you and every adult living in your home
• First aid training — a paediatric first aid course (12 hours minimum)
• Safeguarding training — child protection awareness
• Health declaration — confirming you are physically and mentally fit to care for children
• Home inspection — Ofsted will visit your home to assess its suitability
• Introduction to childminding course — recommended by most local authorities

The registration process typically takes 8–12 weeks. The Ofsted registration fee is currently around £35.

Ratios

Ofsted sets strict ratios for the number of children you can care for:

• Maximum of six children under eight at any one time
• No more than three children under five
• No more than one child under one (unless you have an assistant)
• Your own children count towards these ratios if they are under eight

Sole Trader or Limited Company?

Almost all childminders operate as sole traders. The income levels, the nature of the work, and the simplicity of the tax arrangements all point towards sole trader status.

Register with HMRC for Self Assessment within three months of starting. You will receive a UTR and file a tax return each year.

A limited company structure is very rarely used for childminding and adds unnecessary complexity.

Registering with HMRC

Register for Self Assessment with HMRC as soon as you start your business. If your total self-employment income is above the £1,000 trading allowance, you must register.

VAT registration is required if your turnover exceeds £90,000. Childcare services are exempt from VAT, which means you do not charge VAT but also cannot reclaim it on your expenses. In practice, very few childminders reach the VAT threshold.

Insurance

• Public liability insurance — essential. Covers you if a child or visitor is injured in your home. Most childminding networks include this in their membership.
• Employers' liability — required if you employ an assistant
• Car insurance — must include business use if you transport children in your car
• Home insurance — notify your provider that you are running a childminding business from home. Some standard policies exclude business use.

Specialist childminding insurance packages cost around £80–£200 per year.

Claimable Expenses

Childminders can claim a significant proportion of their household costs:

• Food and drink — meals and snacks provided to minded children
• Home costs — a proportion of mortgage interest or rent, council tax, gas, electricity, water, and broadband based on business use
• Equipment — pushchairs, car seats, highchairs, cots, safety gates, and play equipment
• Toys and educational resources — craft supplies, books, puzzles, outdoor play equipment
• Outings — entry fees, travel costs for activities with the children
• Training and qualifications — first aid renewal, safeguarding updates, early years courses
• Ofsted registration fee
• Insurance premiums
• Childminding network or association membership — PACEY (Professional Association for Childcare and Early Years) or similar
• Cleaning supplies — additional cleaning products due to childminding
• Garden maintenance — the proportion used for childminding
• Phone costs — the business proportion
• Stationery and printing — contracts, policies, learning journals
• Car costs — business mileage at 45p per mile, or the business proportion of running costs
• DBS check costs

HMRC accepts that childminders use their homes extensively for business. Many claim one-third of household costs as a reasonable estimate, though you should keep records to justify your claim.

Accounted helps you track all these expenses automatically, matching receipts to bank transactions so nothing gets missed.

Funded Places and Tax-Free Childcare

Government Funding

If you offer the 15 or 30 hours free entitlement for 3–4 year olds (or the new under-3s entitlement being rolled out), these payments are taxable income and must be included in your Self Assessment.

The funding rate varies by local authority but typically ranges from £5–£8 per hour. Keep records of all funded hours delivered and payments received.

Tax-Free Childcare

Parents may pay you through the Tax-Free Childcare scheme, where the government tops up their payments by 25% (up to £2,000 per child per year). You need to register as a childcare provider with HMRC to receive these payments. The income is taxable in the normal way.

Industry-Specific Tax Rules

Wear and Tear

Your home will experience more wear and tear than usual. The proportion of household maintenance costs you can claim should reflect this — redecoration, carpet cleaning, and repairs to areas used for childminding are all legitimate expenses.

Capital Allowances

Larger purchases — such as play structures, kitchen equipment, or a car used partly for business — qualify for capital allowances. You can claim the business proportion through the Annual Investment Allowance.

Simplified Expenses

HMRC's simplified expenses scheme allows you to claim flat rates for home use:

• 25–50 hours per month: £10 per month
• 51–100 hours per month: £18 per month
• 101+ hours per month: £26 per month

For most childminders working full days, the actual cost method will give a larger deduction than the flat rate. Calculate both and use whichever is higher.

Bookkeeping Tips

• Keep a daily register — record attendance for every child, every day. Ofsted requires this, and it supports your income records.
• Separate business and personal spending — a business bank account makes everything clearer
• Record all income — cash, bank transfer, vouchers, and funded payments
• Keep food receipts — even supermarket shops. Highlight or separate items bought for minded children.
• Track hours worked — this supports your home use claims
• Set aside money for tax — 20–25% of your profits is a good guide

Accounted connects to your bank and categorises your transactions using AI. Built for UK sole traders, it keeps your records Ofsted-ready and your tax return simple.

Key Deadlines

• 31 January — Self Assessment tax return and payment
• 31 July — second payment on account
• Annually — Ofsted inspection (random), insurance renewal, first aid renewal (every 3 years), DBS renewal (every 3 years)

Getting Started

Childminding takes more preparation than most home-based businesses because of the Ofsted requirements. Start the registration process early, get your training done, and set up your finances properly from day one.

Ready to simplify your childminding finances? Sign up for Accounted and let Penny keep your books in order while you focus on the children.