Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps her Department is taking to monitor the impact of the introduction of Making Tax Digital for Income Tax on childminders and other home-based childcare providers; and what assessment she has made of the potential impact of replacing the wear and tear allowance with expense-based tax relief on the sustainability of those businesses.

Childminders play a vital role in childcare. The Government has eased rules on working from schools and community centres and increased early years funding rates above 2023 average fees. These increases reflect increased costs, and from April 2026, local authorities must pass at least 97 per cent of funding to providers.

Childminders can continue to claim tax relief for wear and tear by deducting the actual cost of buying, repairing or replacing items. They can also deduct the cost of business expenses such as utilities, cleaning and equipment. This ensures childminders receive tax relief for all of the costs that they incur in relation to their childminding business.

The government will monitor the impact of Making Tax Digital (MTD) for Income tax on childminder and other home-based childcare providers in the same way as it will for all sole traders moving to MTD for Income Tax.