Coram PACEY are meeting with HMRC during the week ending 16 January 2026 to discuss the proposed withdrawal of the 10% wear‑and‑tear allowance for childminders under Making Tax Digital for Income Tax (MTD for ITSA).
The allowance has been used for many years to cover household wear and tear with a simple 10% deduction. HMRC have said this will not continue under MTD, as the new system requires actual business expenses to be recorded.
This has raised concerns across the sector. Many childminders are unsure how to record household‑related costs in a practical way. Sector organisations want clearer guidance and a fair approach that reflects the realities of home‑based childcare.
Coram PACEY will use this week’s meeting to highlight these issues and ask HMRC how actual‑cost claims will work in practice. They will also raise the administrative impact on small childcare businesses.
At present, HMRC’s position has not changed. The 10% allowance is still expected to end when childminders enter MTD, and no replacement simplified scheme has been offered.
Coram PACEY will share an update after the meeting.
At Accountancy Kids we will continue to monitor developments and provide further information as soon as it becomes available.