SimpleReturns

Company tax returns for childminders and small nurseries

Reviewed by Lee Jones, Founder · Updated 17 July 2026
The short answer

If you look after children through a limited company, whether you are a childminder who has incorporated or you run a small nursery, the filing job is the same as for every company in the country: a Company Tax Return to HMRC and a set of accounts to Companies House, even in a year you made a loss. Your version has three special features: income arrives from three directions (parents, the council's funded hours, and tax-free-childcare accounts), your biggest cost is almost always staff, and your trickiest question is the home. The trap to watch above all: the childminder expense rules everyone shares online are sole trader rules, and they do not apply to your company.

Official source. This guide is a plain-English summary of official GOV.UK guidance, not advice. The authoritative source is Company Tax Returns on gov.uk. Always rely on that over our summary.

What counts as your company's income?

Everything the company was paid for looking after children, whoever the money came from, which for a childcare company is usually three streams added together.

Fees parents pay you directly. If a parent paid it, it is the company's income.

Government-funded hours. That money reaches your company through the council rather than from the parent, but it is still money your company earned for childcare it delivered, so it is trading income like any fee. The scheme runs on paperwork, codes from parents and headcount forms, but your return is built from what the company actually received, so keep the council's payment statements with your bank records.

Tax-free-childcare payments. Some parents pay you from a government childcare account, where the government adds £2 for every £8 the parent puts in. That scheme belongs to the parent, not to you; your company simply receives the payment, and it is income like any other fee.

And sibling discounts? Charge whatever you like. The company's income is simply the discounted amount you actually charged; a discount just means less income.

Your tax bill is then worked out on the profit. Small companies pay 19% on profits up to £50,000, and bigger profits move towards 25%.

What can your company claim?

The rule behind every cost is simple: it has to be for the business. For a childcare company the usual list looks like this:

  • Staff. For a nursery this is the big one, usually the biggest line by far: wages, the employer's National Insurance the company pays on top of them, and pension contributions. If you are hiring for the first time, our guide on taking on your first employee walks through what employing someone really costs.
  • DBS checks and Ofsted fees. The checks on you and your staff, and the fees for registering with Ofsted, are costs of being allowed to trade at all.
  • Toys, equipment and craft supplies. Toys, books, outdoor equipment, paint, paper and glitter: everything you buy for the children to play with and learn from.
  • Food for the children. Meals and snacks for the children in your care are part of the service parents pay for, so they are a business cost. This is not "entertaining", which has its own rules; it is you delivering what you charge for.
  • Insurance. Public liability cover, and employers' liability cover once you have staff.
  • Training. Courses your staff need to do the job, such as paediatric first aid and safeguarding training.

Keep the receipts. The claim is only as good as the paper behind it.

What about the home? A nursery renting its premises has it easy: the rent, business rates and utility bills for the setting are company costs. A childminding company run from your own home is a different story, because this is where the internet will mislead you.

The trap: the childminder expense rules you have read about are sole trader rules

Childminding has famous, generous rules for claiming home costs based on the hours you work. They are all over the forums and Facebook groups. Here is the thing almost nobody says: those are rules for self-employed childminders paying income tax. The moment you set up a limited company, you stopped being that. Your company is a separate legal person, it pays Corporation Tax, and the sole trader concessions do not carry across.

For a company, a cost must be for the business to reduce the tax bill. You do not split your mortgage, heating or council tax down the middle and claim the "business half" the way a sole trader would; for a company that kind of part-personal cost is not a part-claim, and getting it wrong can create extra personal tax for you instead. The clean, simple position is that the company can pay you £6 a week (£26 a month) tax free for working from home, no receipts needed. Anything more ambitious, given how much of your home childminding genuinely uses, is exactly the conversation to have with an accountant, because the company position really is different from the well-known childminder rules.

One more trap that rarely bites: VAT. Registered childcare is usually exempt from VAT, and exempt income does not count towards the £90,000 takings line at which a business must register, so the VAT question rarely troubles a childcare company. If you sell things that are not childcare alongside, extra classes or merchandise, ask an accountant to check where you stand.

What does filing look like with us?

At year end your company has two deadlines to keep apart. Your accounts go to Companies House within 9 months of your year end, and the Corporation Tax itself is due at about the same time, 9 months and 1 day after the year end. Your Company Tax Return, the CT600, then goes to HMRC within 12 months of the year end. A late return costs £200 from the very first day. HMRC's own free filing service has closed, so every company now files through commercial software.

SimpleReturns is built for businesses like yours. You upload the company bank statement and answer a few plain-English questions, no accounting words. You review every figure on one screen before anything is sent, then we file both returns for you: the tax return to HMRC and the accounts to Companies House. It is free to start, no card needed, and filing costs £99 flat for both.

Common questions

Do the childminder expense rules I see in Facebook groups apply to my company?

Almost certainly not. The hours-based home-costs rules people share are for self-employed childminders. A limited company follows different rules, so check anything you read against the company position before acting on it.

Is the funded-hours money taxable?

Yes. It arrives from the council instead of the parent, but it is money your company earned for childcare, so it is normal trading income.

Do I need to register for VAT?

Usually not. Registered childcare is usually exempt from VAT, and exempt income does not count towards the £90,000 registration test. If you sell non-childcare extras too, get that checked.

Can I really claim the children's food?

Yes. Feeding the children in your care is part of the service you charge for, so it is a business cost. It is not the same thing as entertaining clients.

Want your childcare company's return filed for you?

You upload the company bank statement and answer a few plain-English questions, no accounting words. We sort the fees, funded hours and staff costs, work out the profit and the Corporation Tax, and build both filings: the tax return for HMRC and the accounts for Companies House. You review every figure before anything is sent. Free to start, no card needed, and £99 flat covers both.

Start your return

And if you childmind from your own home, we will flag the home-costs question plainly so you can get an accountant to sort that one part.

General guidance, not advice. This guide explains how the rules generally work for small UK limited companies. It isn't tax advice for your specific situation, if you're unsure, check with us or an accountant.