What should childcare providers be keeping for accounting purposes?

All businesses need to keep information for accounting purposes – especially when putting together their end of year tax returns. But what does and doesn’t need to be kept? We’ve put together a handy guide to help you whether you’re a large nursery or self-employed childminder.


Childminding is different to other forms of childcare provision as it is a service you are providing in your own home. You will already have had your Ofsted inspection and, once approved, can start putting your paperwork in place.

As you are working in your own home you will need relevant public liability insurance. There are many companies that specialise in childcare settings and will be able to assist you in making sure you have the correct, legal cover for your home. As with all paperwork, you must keep copies of the certificate for 6 years from the end of the last financial year.

You will also have to register yourself as self-employed which means you will have to prepare your own tax returns, which in turn will let you know how much income tax and national insurance – if any – you will need to pay. For your tax returns you need to make sure you keep records of everything you have to pay for, including insurances, toys, food, drink and business mileage if required. As you are working from your home setting you can also claim for a share of your household bills including your heating, lighting, water and council tax.

You can also make a claim for milk payments if the child/children are under 5 years old, or formula if they are under 12 months.

If you have any children coming to you that require local authority payments you must also keep all records. The same applies to any childcare vouchers you receive as well as bank transfers and cash. Childcare fees in are just as important as expenditure purchase invoices or till receipts so any payment you receive regarding a child in your care must be kept with full information of who paid the money, how, when and how much.

Creches and Nurseries

If you are running a crèche or nursery the paperwork you have to keep is very similar to that of a childminder. As well as all the payments coming in and the costs of running your setting – heating, rates, rent, food, equipment – you must also keep records of insurances, staff wages – including NI and tax payments, training course fees and visitor costs – such as a sign language tutor or a children’s entertainer.

You would also need to keep all your paperwork when dealing with a parent or guardian, the local authority or any other company that you deal with.

As with childminders, you must keep all paperwork for 6 years from the end of the last financial year. Paperwork must be kept secure and you must be able to

have easy access to it.

Many childcare providers do not feel they have the time or the experience required for keeping all their paperwork together and this is where companies such as ourselves can step in. We can provide an accounting service that covers everything – including tax returns, pensions, wages – or we can provide one off services such as putting together your tax return. Contact us today for more information on what would work best in your setting.


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